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 prices fall

Heading into September, the fed cattle market faces what is traditionally a tough month. Prices last week took a step back with weighted average steers now at their lowest point since mid-July, falling $3.37 to $133.56.

September fed prices are usually the low, strengthening from August to September only once in the past dozen years.

Dressed sales for the week ending Sept. 4 were $224-$225 per cwt. delivered.

Both major packers bought for end-of-month delivery, but there is concern that lift times have begun to stretch. Longer lift dates and one packer limiting grid cattle from each producer could put additional pressure to sell on the cash market to keep carcass weights under control.

Western Canadian carcass weights averaged 912 pounds, six lb. larger than a year ago. Weights are expected to increase into fall, peaking in late October and early November.

Canfax reports that the average increase from spring lows to fall highs is 105 lb. That would mean carcass weights are on track to peak at 963 lb., which would beat the 2015 high of 944 lb.

In Ontario, bids dropped over the week from $240 per hundredweight delivered to $235 per cwt. Deliveries are scheduled for Sept. 21 and Sept. 28. Cash to cash, Ontario fed prices were about $7.13 per cwt. better than the U.S. market. This is the strongest basis for the beginning of September since 1991.

Fed cattle supply is expected to remain ample over the next 60 days, and prices next week are expected steady to lower.

Non-fed prices eased lower last week. D2 cows were nearly $2 per cwt. lower than the previous week while D3s were steady. Dressed cow bids also were lower at $165-$170 per cwt. delivered.

Butcher bulls were down $2.25 per cwt. to average $112.96.

Western Canadian non-fed slaughter was down one percent and year to date is 24 percent lower.

According to U.S. Department of Agriculture numbers, Canadian slaughter cattle exports are six percent higher than they were a year ago through to Aug. 22.

Larger cow exports are driving the numbers. Plant disruptions in the West resulted in western Canadian non-fed slaughter exports at 41 percent higher than last year. Eastern exports were up 23 percent.

But the big shift in cattle trade continues to be feeders. Exports through the first half of the year were only 78,546, or 45 percent below a year ago, and 49 percent under the five-year average. Smaller calf crops mean more calves are fed in Canada.

Canadian feeder imports are also growing and are just over 100,000, or 17 percent higher than 2019.

Alberta feeders traded unevenly for the week ending Sept. 4. Average steer prices were about $1 per cwt. lower than the previous week. Heifer prices were about $1 per cwt. higher.

Pressure on calf prices

Calves between 500 and 600 lb. slipped lower by $3.75-$4.50 per cwt., while six and seven weights were fully steady.

The lighter weights were stronger moving east on active Ontario buying. Saskatchewan saw a $2 per cwt. price premium to Alberta last week, and Manitoba traded at a $6 per cwt. premium.

Prices for large feeders over 800 lb. were fairly consistent across the Prairies and generally $1-2 per cwt. lower than the previous week.

Volumes at Alberta auctions were 20 percent larger than the week previous and three percent ahead of the same week last year. Year-to-date volume at auctions is nine percent lower at 662,120 head.

Calf prices are predicted to stabilize over the next week, while auction volumes will be manageable. Auction volumes have tracked on the five-year average closely in the third quarter, and that is expected to continue with mid-September offerings higher. Feeders over 800 lb. should see price momentum through the month.

Cut-out values slide

The U.S. choice cut-out value dropped about $4 last week, falling from $231.54 per cwt. to $227.24. Select cut-out values saw a $2 drop, from $214.26 to $212.50 per cwt. These are seasonally lower.

There is strong demand for premium chuck grind, and it traded last week at parity with round.

U.S. trade was scattered through the week. China has been active in the new corn crop market. Drought conditions spreading into Nebraska and the recent storm damage in Iowa have analysts suggesting the USDA average crop yield of 181 bushels per acre is overstated. U.S. hog prices rallied 20 percent from July lows, but the base price is still the second lowest in the past 15 years.

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