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.
Signs of stability
The fed market showed signs of stability last week after falling $16 per hundredweight over the previous five weeks. Weighted average steer prices closed 45 cents per cwt. lower to average $145.42 per cwt. and were within $3.50 per cwt. of 2018 annual lows. Fed heifers dropped by 39 cents last week to average $144.49 per cwt.
Though competition on the cash market was limited, all three western Canadian packers bought cattle. Dressed sales were reported from $243-$245 per cwt. delivered. Lift dates were all over the map. Two packers were buying cattle for the first and second weeks in July, while the other was scheduling cattle for next week delivery.
In Eastern Canada, one major packer was not even bidding on cattle last week. With little to no eastern buying interest, it was no surprise that fed cattle from Saskatchewan were being bid on for slaughter in Alberta.
Feedlot pen conditions are in excellent shape, and cattle performance has been above average for this spring, suggesting carcass weights should be nearing a bottom. There is a strong correlation between carcass weights and quality grades. As carcass weights decline, so does the percentage of Prime and AAA grade cattle.
Canadian AAA and Prime grades as a percentage of all A grades is the lowest it has been all year at 55.61 percent compared to 57.99 percent last year.
Year-over-year declines in Prime/AAA grades is surprising given that steer and heifer carcass weights are larger than last year.
Western Canadian fed slaughter for the week ending June 1 totalled 41,500 head, the second largest slaughter this year. Last year, western Canadian weekly fed slaughter in June averaged 46,000 head. Larger slaughter rates for June will be critical to get through large third quarter numbers. If moisture conditions don’t improve, fed cattle will compete with cows for hook space.
In the United States, trade was scattered last week. Dressed sales in the north ranged from US$183-$186 per cwt., steady to $2 lower than the previous week.
For the week ending May 25, steer carcass weights averaged 842 pounds, the lowest since May 2017. It was the 16th consecutive week that slaughter volumes were above year-ago levels.
Cow price drops
Prices for D2 cows were C$88-$100 per cwt. last week, averaging $94, which was $3.25 per cwt. lower than the previous week. D3s were $80-$90 per cwt., averaging $84.40, steady with the previous week. Prices trended lower on ample offerings.
Dressed cow bids slipped sharply lower June 7 to $166-$175 per cwt. delivered. From annual highs seen last week, butcher bulls eased $1.45 per cwt. lower to average $110.55 per cwt.
Western Canadian non-fed slaughter volume for the week ending June 1 was down eight percent to 6,489 head, and year-to-date volumes were eight percent larger, totalling 192,319 head.
Current slaughter inventories are scheduled for the last week of June delivery and non-fed supplies could build if moisture conditions don’t improve. Pent-up grilling season demand should improve this month.
Mixed feeder trade
Feeder cattle traded mixed last week with average steer prices firming $1.75 per cwt. higher on good demand, and heifer prices eased almost $2 per cwt. lower on ample supplies. Steer calves from 500-700 lb. traded fully steady with the previous week while same-weight heifers eased $1.50-$2.75 per cwt. lower.
Good late spring grass demand continued for 700-800 lb. feeders, and prices continue to seasonally strengthen. Steers larger than 800 lb. saw good feedlot demand, and prices rallied around $3.50 per cwt. higher than the previous week while similar weight heifers saw prices ease $1-$4 per cwt. lower.
Nearby barley prices surged sharply higher last week and may have shifted placement interest away from poorer-converting heifers toward steers. Auction volumes swelled 12 percent larger last week with a few more slaughter cows and replacement type heifers on offer as dry conditions persist across the Prairies. Year- to-date auction volumes were down four percent, totalling 546,365 head.
The U.S. Department of Agriculture reported that Canadian feeder exports to the U.S. for the week ending May 25 eased seasonally lower than the previous week to 4,224 head and year to date are down four percent, totalling 120,329 head.
Slow grilling demand
In U.S. beef trade, cut-out values moved lower last week. Choice was down US$1.33 per cwt. to average $222.25, and Select was down $1.71 to average $207.16. The Choice/Select spread is at $15 per cwt., compared to $22 per cwt. in the same week last year. Slow grilling demand because of cold and wet weather in some parts of the U.S. combined with a larger percentage of Choice and Prime production have pressured the premiums on Choice this spring.
Canadian cut-out values for the week ending May 31 were not available.