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.
Virus concerns stall market
The Alberta fed market struggled again last week as financial markets and commodities plummeted on intensified COVID-19 concerns. Early packer bids started at $245 per hundredweight delivered, and light-dressed trade eventually surfaced March 4 and March 5 at $245-$249 per cwt. delivered.
A handful of comparable live trade was also reported last week. Weighted average steer prices closed the week generally steady with the previous week, averaging $147.28 per cwt., while heifer volumes were too light to establish a market trend.
Last week’s aggressive technical market slide abruptly quelled seasonal momentum. Over the past two weeks, weighted average steer prices have softened from higher than year ago to $6.50 per cwt. lower. Western Canadian steer carcass weights for the week ending Feb. 29 eased one pound lower than the previous week and six lb. lighter than the same week last year.
Western Canadian fed slaughter for the same week surged 30 percent from the previous week to 39,041 head and year-to-date was six percent larger at 312,761 head.
Canadian fed cattle/slaughter cow exports to the United States for the week ending Feb. 22 were 17 percent lower than the previous week at 9,708 head and 10 percent smaller than the same week last year.
In Ontario, light volume fed trade saw prices generally steady to $4 per cwt. lower than the previous week. Dressed sales were marketed at $244-$245 per cwt. delivered. Cattle prices last week were scheduled for March 16-23 delivery.
In seven of the past 10 years, Alberta fed prices have firmed higher during the second and third week of March. Cut-out values have traded generally sideways over the past two weeks and spring beef demand is expected to improve. Continued market uncertainty is anticipated with COVID-19.
In the U.S., light to moderate fed trade was reported last week, with live sales at US$113 per cwt. in most feeding areas, $2 per cwt. lower than the previous week. Dressed sales in the north were reported at $180-$182 per cwt. delivered, $3-$5 per cwt. lower than the previous week’s Nebraska rail average.
COVID-19 concerns continued to limit cash market upside.
Last week’s total U.S. slaughter was estimated at 647,000 head compared to 607,000 head for the same week last year.
Light offering for non-fed
Non-fed prices have fared much better than the fed cattle market. Fed cattle prices have slipped below year-ago levels while butcher cow and bull prices have been trading higher than last year.
On a light offering of non-fed cattle, butcher cows and bulls traded mixed through commercial auction facilities. D2s averaged $86.29 per cwt. and D3s averaged $76.50 per cwt. Butcher bulls averaged $103.75.
Over the past couple of weeks Alberta D2 cow prices have been trading at a C$4 premium to the U.S. utility market. Similar to the cow market, butcher bull prices have trended sideways since the start of the year, averaging from $100-$104 per cwt. Based on the five-year average, butcher bull prices historically strengthen over the next two to three months with prices peaking in late May/early June.
For the week ending Feb. 29, Western Canada bull slaughter totalled 130 head. Year-to-date bull slaughter is up nine percent compared to last year. A larger percentage of the cows that were put on feed last fall have been worked through and packers are expected to scale back hours for non-fed cattle.
Feeder prices mixed
Lightweight stocker and feeder cattle prices have been moving in opposite directions, which is seasonal for this time of year. Trading $2.50 per cwt. lower, 850 lb. steers established new annual lows last week, the second lowest weekly price seen over the past year. Alberta 500-600 lb. steers traded slightly lower but remain within $1.25 per cwt. of their high posted three weeks ago.
The price spread between 550 lb. and 850 lb. steers has reached $57 per cwt., the widest since March 2018. Grass buyers have been very active on the stocker market but are also seeing strong competition from the terminal feedlots.
With the pullback in the futures market, larger cattle on feed numbers in North America and global uncertainties surrounding COVID-19, it has changed the marketing strategies for some producers. Volumes have not been huge but some cattle that were initially purchased for summer grazing programs have instead been sold on the cash market.
On a cash to cash basis, Alberta steer calf-feeder prices are trading at roughly a C$4 per cwt. premium to the U.S. market. U.S. buying demand has been limited but some interest has been noted on the heifer market. Canadian feeder exports to the U.S. totalled 3,811 head, 37 percent lower than last year and 42 percent lower than the five-year average.
In the outlook, there has been early speculation that U.S. corn acres will be record large, while in Western Canada there could be more barley acres seeded this year. New crop barley sales from September to December 2020 have been reported at $215 per tonne delivered into southern Alberta.
Cutouts move higher
In U.S. beef trade, cut-out values firmed higher last week on generally moderate demand and offerings. Choice averaged US$207.25 per cwt., up slightly from the previous week and Select averaged $201.06, also up from the previous week.
Spring beef demand is expected to improve but COVID-19 concerns continue to impair seasonal momentum.
Canadian cut-out values for the week ending Feb. 21 eased C$3.55 and $1.69 per cwt. lower for AAA and AA respectively and were steady with the same week last year. AAA averaged $273.37 and AA averaged $266.24.