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 prices rebound
Alberta direct cattle sales saw moderate volume trade last week with prices rebounding sharply higher. Fed steer prices jumped $14.81 per hundredweight to average $121.81. Heifer trade was too light to fully establish a trend. Dressed sales traded widely from $185-$240 per cwt. delivered with all major packers procuring inventory.
Last week’s Alberta cash to cash fed basis weakened to an estimated -$37.50 per cwt. The U.S. Department of Agriculture reported western Canadian fed cattle-cow exports to the United States for the week ending May 2 were down 20 percent from the previous week at 4,589 head. Total Canadian fed cattle/cow exports to the U.S. for the same week were 16 percent lower than the previous week and year to date were three percent larger at 178,299 head.
Western Canadian fed slaughter for the week ending May 9 rebounded aggressively 174 percent larger than the previous week to 22,836 head. Year to date western Canadian fed slaughter was down 10 percent at 610,315 head. Moderate dressed trade surfaced in Ontario last week with the majority of sales reported at $242 per cwt. delivered.
Some Saturday kill shifts were added last week to offset the Monday Victoria Day holiday. Partial business re-openings across the country should improve beef demand and will encourage packers to ramp up production if possible.
Cash market price upside is expected to remain limited until the significant backlog of market ready cattle can be worked through.
In the U.S., light trade saw prices US$4-$14 per cwt. higher than the previous week’s Texas average in the south from $110-$120 per cwt. In the north, live sales were reported from $110-$115 per cwt., which was $10-$15 higher than the previous week, and dressed prices were sharply higher from $180-$190 per cwt. delivered.
Steer carcass weights for the week ending May 2 firmed two pounds heavier than the previous week to 893 and were significantly 41 lb. larger than year ago.
Cows trade higher
Butcher cow prices had a good week last week, trading $6.50-$7.50 per cwt. higher. From their lows in mid-April, D2 cow prices have rallied over $11 per cwt. D2s averaged $78.79 per cwt. last week and D3s averaged $68.25.
Bred cow volumes have been light, but the few that have been trading are well above slaughter price. Demand has been strong enough from cow-calf operators to keep bred cows out of the slaughter mix.
Butcher bull prices continue to impress. Prices are $2.50 per cwt. higher than last year, averaging $108.64 per cwt., and are only $9 per cwt. shy of their highs set in late March.
Major packers still remain off the cow market, and their main focus has been getting some of the cows they priced in early April cleaned up. Volumes are not expected to be large, but with non-fed prices strengthening over the past few weeks, cows that were intentionally held back could be sold over in the next few weeks.
China announced it has banned exports of beef from four Australian abattoirs, a market development that bears watching.
Fed steer prices rise
From their April price lows, 850 lb. steers have rallied $17 per cwt. Stronger prices and stronger cash to futures basis levels have re-energized selling interest. Last week Alberta auction volumes totalled more than 18,000 head. This is the first time in 12 weeks that auction volumes have been above last year.
The bright spot of the market continues to be the calf market. Trading $7 per cwt. higher last week, 550 lb. steer calves averaged $230 per cwt. and within $2.50 per cwt. of their highs back in February.
Weekly Canadian feeder cattle exports to the U.S. totalled 3,243 head, 57 percent lower than last year and 49 percent lower than the five-year average. Trading via electronics, the forward delivery market was lightly tested last week for both calves and yearlings.
Alberta and Manitoba yearling heifers weighing 850-950 lb. for late summer/early fall delivery traded $165-$174 per cwt. f.o.b. the farm. Forward delivery prices have trended sideways for the past two months.
B.C. steer calves for October delivery traded at $200 per cwt. based at 695 lb., and heifer calves traded $20 per cwt. back of the steers.
Over the past 10 years, excluding 2014, the average price decline for a 600-700 lb. steer from first half of the year highs to second half of the year lows stands at 13 percent. Assuming February highs at $214 per cwt., a historical decline of 13 percent would put potential lows for 650 lb. steers in the upper $180s per cwt.
For the first three months of this year, Canadian feeder cattle imports from the U.S. have totalled 53,000 head, 18 percent larger than last year.
Cut-out rally ends
In U.S. beef trade, increased production capped historically high U.S. cut-out values and prices trended lower. Choice averaged US$450.92, down $7.62, and Select averaged $437.40, down $11.17 from the previous week.
National U.S. slaughter for last week was estimated 10 percent larger than the previous week at 499,000 head. Increased slaughter is anticipated, and cut-out values should continue to soften.