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.

Fed market rallies

The fed cattle market has made quite the recovery. Three weeks ago, fed prices posted a low of $107 per hundredweight, and since then fed steer prices have rallied $41 per cwt., closing at slightly more than $148 per cwt. last week. Over the span of three weeks, this is a price difference of $600 per head.

Last week there was a good mix of calves and yearlings and there was no price difference between the two types of cattle. While packers were increasing prices, they were restricting the number of cattle they bought from producers. Competition on the cash market was limited, with one packer buying most of the cattle.

Dressed sales were reported from $240-$250 per cwt. delivered. With the backlog of fed cattle, lift times are not as long as expected. Most of the cattle that traded last week will be picked up in early June.

Alberta fed cash-to-futures basis levels strengthened, going from -$10.64 to +$11.24 per cwt. last week. Based on the latest USDA data, U.S. imports of Canadian fed cattle totalled 6,910 head for the week ending May 17 compared to 4,694 last year.

Western Canadian packers are slowly ramping up production. There have been reports that packers are running at 60 to 70 percent capacity. With more workers showing up to work and as the workforce adjusts to new safety measures, hopefully over the next few weeks packers will be able to get closer to 80 to 90 percent plant utilization.

In Ontario, dressed sales were reported from $260-$265 per cwt. delivered, which was $18-$25 per cwt. higher than the previous week. Given that Eastern Canada has been trading at a premium to the western Canadian market, fed cattle from Manitoba and Saskatchewan are being shipped east for slaughter.

Although no timelines have been set, there have been reports that work is being done to get the former Ryding-Regency packing plant in Toronto back on line and operational.

Western Canadian steer carcass weights are 68 pounds larger than last year. This year-over-year increase looks alarming, but no major conclusions should be drawn in terms of feedlots being uncurrent. Last year strong prices in early May encouraged producers to pull calves forward, but this year calves have been slower to come to market.

Trade was scattered in the United States last week. Dressed sales ranged from US$175-$190 per cwt., which was steady to $5 per cwt. higher than the previous week. Live sales were reported from $115-$120 per cwt., steady to $5 per cwt. higher.

Calf and feeder prices in the U.S. are trading $10-$13 per cwt. lower than last year. Beef cow slaughter totalled 49,299 head, 20 percent lower than last year.

Cows up slightly

A limited offering of non-fed cattle was reported at auction last week. Slaughter cow prices firmed modestly C$1.25 per cwt. higher than the previous week. D2 cows averaged $79.56, and D3 cows averaged $69.56 per cwt. Butcher bulls saw prices ease $1.45 per cwt. lower to average $107.18.

Direct rail cow bids were limited, and a dressed market trend was not fully established. Modest non-fed interest from local packers was reported last week to fabricate some spec grind products, but fed slaughter will remain the priority moving forward.

Western Canadian non-fed slaughter for the week ending May 16 eased three percent lower than the previous week to 2,564 head and year to date was down 21 percent at 141,115 head.

A light volume of non-fed cattle continued to head south of the border for slaughter. Lean 90 percent U.S. grind rallied almost $12 per cwt. higher last week, and improved grilling demand should enhance non-fed prices.

Good grasser demand

Alberta feeders traded mixed last week with calf prices easing lower, and larger feeder prices were steady to modestly higher. Calves from 400 to 700 lb. saw prices soften $1-$3 per cwt. lower than the previous week.

Good grass demand continued last week, and although 500-600 lb. steer prices were $3.30 per cwt. lower than the previous week, average prices were $6 per cwt. higher than the same week last year.

Feeders heavier than 800 lb. saw good demand to place against the fourth quarter fed market, and prices continued fully steady. On May 22, large steers heavier than 900 lb. for deferred September delivery saw a $12+ per cwt. price premium to spot.

Eastern buying interest continued supportive last week. Weekly auction volumes eased one percent lower than the previous week and were 48 percent larger than year ago.

Year-to-date auction volumes are 17 percent lower than the same week last year at 423,557 head.

The USDA reports that Canadian feeder exports for the week ending May 9 were down 19 percent from the previous week at 2,623 head, and year-to-date volume was down 46 percent, totalling 60,267 head.

Good demand for grass cattle is expected to continue over the next two weeks, and calf prices are anticipated generally steady. Large feeders to place against the fourth quarter should see prices continue to strengthen, but a wider trade range is anticipated relative to quality as summer supplies tighten.

Increased fed slaughter production should enhance demand for all types of bunk replacements.

Cutout plunges

In U.S. beef trade, the USDA estimates that last week’s total cattle slaughter will rebound 11 percent larger than the previous week to 555,000 head. Increased production combined with retail beef price resistance pressured cut-out values sharply lower last week, and all primals plummeted lower.

Choice averaged US$401.81 per cwt., down almost $50 per cwt., and Select averaged $383.53 per cwt., down almost $55 from the previous week. Cut-out values are expected to soften on increased beef production.

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