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.

Active fed trade

Alberta direct cattle sales saw active trade last week with dressed sales $2-$2.50 per hundredweight stronger than the previous week at $242-$242.50 delivered. Light live trade was reported from $141.50 to $142.75 f.o.b. the lot. Weighted average steer prices rallied higher for the fifth straight week, closing at $143.98 per cwt., which was $1.50 per cwt. higher than the previous week.

Ontario dressed sales were generally $2-$4 per cwt. higher than the previous week with most trade reported at $236 per cwt. delivered for the first and second weeks of November. Western Canadian fed cattle slaughter for the week ending Oct. 12 was down nine percent from the previous week at 41,456 head, but year to date was seven percent larger, totalling 1,643,717 head.

Canadian steer carcass weights for the same week were up one pound from the previous week, averaging 934 lb., and were 10 lb. heavier than a year ago. Canadian fed cattle/slaughter cow exports to the United States for the week ending Oct. 5 were 11 percent larger than the previous week to 9,496 head. Year to date exports were 21 percent larger, totalling 349,950 head.

Both major packers could add a Saturday kill to make up for the Thanksgiving holiday. Cattle procured last week are loosely scheduled for the first half of November delivery, but a few will likely be pulled forward and hit the kill floor in October. Feeding margins continue firmly in the red, and feedlots are not inclined to long feed. Aggressive harvests are expected to continue through October on improved holiday buying interest and lucrative kill margins.

In the U.S., light live trade was reported last week in the north at US$111 per cwt., $1 per cwt. higher than the previous week. Cattle futures sold off hard on Oct. 18 following the review of a building explosion at the Cargill Dodge City plant and flushed out scattered live trade at $108 per cwt. in the south, $1 per cwt. lower than the previous week.

A few dressed cattle traded $1-$3 per cwt. higher in the north, from $173-$175 delivered.

Low non-fed volume

Prices for D2 cows ranged from C$80-$93 per cwt. last week to average $86.60, while D3 prices ranged from $70-$82 to average $75.92. Slaughter bulls averaged $102.40, down by $1.54 per cwt. from the previous week.

Even though cow slaughter volumes have picked up, non-fed volumes through commercial auction facilities continue to be very light for this time of year. Adequate fall moisture has allowed producers to extend their grazing season, and harvest delays have also meant producers have been slow to gather cattle.

Over the past six weeks D2 cow prices have trended sideways, averaging on either side of $86 per cwt. Considering the seasonality of the cow market, part of the reason butcher cow prices have held up so well and defied lower fall prices is the strength of the trim market. Canadian 85 percent fresh trim prices are 22 percent higher than last year and are trading within $4 per cwt. of their annual highs.

On a cash to cash basis, Alberta cow prices are trading at a $6 per cwt. premium over the U.S. utility cow market compared to a $12.25 per cwt. premium last year. Looking at the U.S. market, according to the latest drought monitor map, drier conditions are starting to develop in the southern U.S., which could increase culling pressure.

Slow start to fall run

The fall calf run volumes have been much lighter compared to the past couple of years, leaving some asking where the calves are. Given ample forage stocks and feedgrain availability, this has prompted some producers to retain more heifers while others are keeping back more of their lightweight calves to background.

Steer calves had a strong week last week with prices up $1-$4 per cwt., while heifer prices were barely steady. Demand from Eastern Canada continues to be strong with most of the interest noted on steer calves.

Feeder steers weighing more than 800 lb. set new highs last week. For the middle of October, this is the strongest feeder basis over the past 20 years. Alberta calf prices have been trading at roughly a $10 per cwt. premium to the U.S., which will keep calves in Canada.

Looking at the most recent import data, for the month of August, U.S. calf/feeder imports into Canada totalled 17,839 head, 26 percent higher than last year. From January to August, U.S. feeder imports are up 34,000 head compared to last year.

Even though calf volumes have been slow to build, larger numbers are still ahead. Despite sluggish feed barley export demand, feed barley bids have strengthened.

Beef trade

In U.S. beef trade, cut-out value continued to strengthen last week with seasonal demand supporting prices. Choice and Select were up US$2.48 per cwt. and $5.94 per cwt., respectively, with Choice averaging $218.11 and Select averaging $192.60.

Canadian cut-out values for the week ending Oct. 11 were down C$2.17 per cwt. on AAA and $6.73 per cwt. on AA. The AAA/Choice spread weakened from -$6 per cwt. to -$10 per cwt., but in line with year ago levels. The AA/Select spread also weakened from +5 per cwt. to -$1 per cwt. compared to -$4 per cwt. last year.

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