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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.

Pressure on fed

Fed cattle prices have been under extra pressure since the fire at a major Tyson packing plant in Kansas last month.

Fed prices are averaging in the low $140s per hundredweight and continue to hover near annual lows. Assuming an average $106 per cwt. Nebraska fed price, Alberta fed prices have moved to a slight premium against the Nebraska market. This is only the second time this year that Alberta fed prices have been at a premium to the United States.

All three western Canadian packers were bidding on the cash market but competition was lacking as one packer bought most of the cattle. Dressed sales were reported form $235-$239 per cwt. delivered. Cattle that were bought last week would not be lifted for three to four weeks.

Alberta fed cash to futures basis weakened, going from +$3.18 per cwt. to +$1.63. Given the cattle that traded last week would be delivered in mid to late September, cash to futures basis levels against the October live cattle contract ranged from +7 to +10.25 per cwt.

Last week there were reports of $1-$2 per cwt. dressed premiums being offered for cattle that would grade better than 70 percent AAA. Even though Canadian beef cutout values have not been able to keep pace with the U.S. Choice and Select market, Canadian processing margins are still very profitable. All three western Canadian packers worked last Saturday and Western Canadian fed slaughter volumes for the week ending Aug. 24 totalled just over 50,000 head, the largest weekly fed slaughter since September 2005. In Ontario, dressed sales ranged from $235-$238 per cwt. delivered and most of the cattle would be lifted during the week of Sept. 9.

September is traditionally not a great month for the fed cattle market and it is sound like there could be a few more fed contract cattle for the month of September compared to August.

Western Canadian feedlot inventories may be losing currentness while eastern Canada is gaining. Eastern Canadian steer carcass weights are two pounds smaller than the five-year average while western Canadian steer weights are 17 lb. heavier than the five-year average. In nine out of the past 12 years, fed prices have trended lower from August to September.

In the U.S., fed trade was scattered last week. Dressed sales in the north were US$5 per cwt. lower than the previous week. Live sales in the north were reported at mostly $106 per cwt., while sales in Texas and Kansas were reported at $103. Weekly slaughter estimates were pegged at 644,000 head, which is 1,000 head lower than a year ago.

Cows move lower

Non-fed cow prices eased lower last week on softened beef summer demand. D2 slaughter cows were 71 cents per cwt. lower than the previous week, averaging C$89.79. D3 prices slipped $1.16 per cwt. lower to average $79.14.

Dressed cow bids were in a tight trade range and prices eased to around $175-$178 delivered.

Butcher bull prices averaged $105 per cwt. last week, down $2.78. Western Canadian non-fed slaughter volumes for the week ending Aug. 24 surged 17 percent larger to 6,501 head and year to date was up six percent to 269,223 head.

Non-fed volumes should remains manageable moving forward and significant seasonal volumes are not anticipated until late September. Grilling season demand will continue to dwindle and prices are expected to soften. Feeder cow interest could improve during the fourth quarter to enhance the non-fed market if competition for feeders intensifies.

Auction volume low

Pasture conditions have allowed grazers a wider marketing window this summer and year to date auction volumes continue to track below year ago. A handful of special sales flushed a few more feeders to auction last week and average prices rallied over $6 per cwt higher.

Good feedlot demand was observed for all types of feeders and strong Eastern Canada interest was observed for calves. Light calves from 400-500 lb. traded stronger with steer prices firming $3.75 per cwt. higher and similar weight heifers $9 per cwt. higher.

Feeders form 600-900 lb. traded sharply higher with steers up $7.50-$9 per cwt. from the previous week and same weight heifers $6-$11.50 higher. Big yearlings over 900 lb. saw prices firm modestly higher last week.

A significant volume of yearlings from 1,000-1,100 lb. was offered across western Canada last week. Total weekly sale volumes were one percent larger than the previous week at 17,592 head and year to date were down 10 percent totaling 699,896 head.

USDA reports Canadian feeder exports to the U.S. for the week ending Aug. 17 were larger than the previous week at 1,902 head and year to date are nine percent larger at 157,318 head.

Strong prices and deteriorating pasture conditions will continue to pull a moderate volume of yearlings to auction over the next couple of weeks. Special calf sales will kick off the fall run during the second half of September and auction volumes will seasonally begin to swell. Ample forage across the prairies and lower new crop feed grain prices bolstered feeder optimism last week but prices are anticipated barely steady to modestly lower.

Beef lower

In U.S. beef trade, cutout values were down US$7.09 per cwt. on Choice, averaging $232.19 and down $3.13 per cwt. on Select, to average $212.78.

Canadian cutout values for the week ending Aug. 23 were not available.

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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