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Canfax report

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.

Fed cattle fall

Fed prices continue to slip for the week ending May 31.

Limited live trade averaged $144 per hundredweight. The majority of Alberta sales were dressed from $245-$246 per cwt. delivered, while Ontario was $250-$257 per cwt.

Western Canadian fed cattle slaughter for the four day week ending May 25 eased eight percent lower than the previous week to 35,927 head, but year to date it is up seven percent at 755,235 head.

Packers have secured a significant volume of fed inventory for June, and a cushion is building into the first half of July.

Western Canadian steer carcass weights for the same week were two pounds lower to 839 lb. but were 33 lb. heavier than a year ago. The average so far this year is 913 lb. Year to date, nearly 66 percent of graded carcasses made AAA, and the majority fell into the yield grade 2 and 3 categories.

Canadian fed cattle-slaughter cow exports to the United States for the week ending May 18 were somewhat larger than the previous week at 7,557 head. So far this year, more than 188,750 have been exported.

Feedlots are expected to remain willing sellers as market-ready supplies continue to grow. The cash market lacks leverage, and prices next week are expected to struggle.

Feeder prices

Cattle futures are under pressure so the feeder and calf market is softening slightly. From their lows in February, steers in the 800-900 lb. category have strengthened by $6 per cwt. Alberta steers in that range averaged $181.13 per cwt., British Columbia $173.63 per cwt., Saskatchewan $178 per cwt. and Ontario $176.21 per cwt.

The heifer market has not been able to keep pace with the steers trading $2 per cwt. above their lows. The heifer market has been disappointing because some replacement calibre heifers have been offered on the feeder market due to lack of pasture and feed.

The rising cost of gain is also affecting the heifer market. Late in the week, barley sales were reported from $275-$279 per tonne delivered into southern Alberta, which is a new annual high. Feeder prices are expected to trend higher into the summer. The 850 lb. feeders could peak around $200-$203 per cwt., similar to the past two years.

A lack of moisture is a major concern across the West. Some grass cattle may not get turned out and will go on feed instead.

To date, 116,105 feeders have been shipped to the U.S., a three percent change over last year.

More cows culled

More cows are showing up at commercial auction facilities, and D2 cow prices continue to trade within 50 cents per cwt. of their annual highs. On a dressed basis, cow prices are trading roughly $60 per cwt. back of the fed market, the narrowest the cow-fed cattle price spread has been this year.

Canadian 85 percent fresh trim prices are 6.5 percent higher than last year and six percent better than the three year average, whereas cow prices are generally par with last year and four to five percent lower than the three year average.

Canadian trim prices are holding because of the overseas market. Australia-New Zealand lean trim prices are trading well above last year because export demand from Asia has been strong, keeping their product out of the North American market. From January to March, Canadian beef imports from New Zealand and Australia are down 12 percent and 23 percent, respectively, compared to last year.

Cut-out values variable

In the beef trade, U.S. cut-out values inched higher this week with Choice up $2.79 per cwt. and Select up $2.34 per cwt. Middle meats rebounded from the contra-seasonal downtrend with ribs up $4 per cwt. on Choice and $12 per cwt. on Select, and loins up $2 per cwt. on Choice but down 48 cents per cwt. on Select.

Canadian cut-out values for the week ending May 24 traded sharply lower after the May long weekend. AAA and AA were down $11 per cwt. and $6 percent per cwt., respectively. The AAA cutout was $283.90 while AA was $265.71. The decline in AAA was driven by declining middle meat values with ribs and loins were down 10 percent and four percent, respectively.

The AAA cutout is now back to a $10 per cwt. discount to Choice compared to a $2 per cwt. premium last week. The AA cutout is at a $7 per cwt. discount to Select, compared to a $2 discount a week ago.

Markets at a glance

Copyright © 2019. All market data is provided by Barchart Market Data Solutions. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

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