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.

Lows in?

The Chicago cattle futures market rallied and American cash prices rose, but the Canadian cash market was a bit sluggish early, although it showed strength late in the week.

The Canfax weighted average on steers was $147.42 per hundredweight, down 22 cents, and heifers were $146.39.

Read Also

Russian pulse trouble reports denied

Russia’s pulse crop will be larger than last year, which won’t help prices rally from their doldrums.

Both Alberta packers were active, and no cattle were sold to the United States.

Trade volumes were moderate. Some passed on current prices hoping for stronger values this week, but others had to sell to manage finished weights. Western Canadian average steer carcass are now heavier than 900 pounds, and eastern Canadian carcasses averaged 917 lb.

Western Canadian fed slaughter last week was again near 41,000 head.

Fed supplies are ample, and even with the larger kill levels, Alberta packers are generally buying cattle for delivery two to three weeks out.

Basis levels seasonally weakened but are stronger than the five year average, even with the larger supplies.

The U.S. posted strong job gains in July. Employment increases usually support cattle futures because it implies stronger beef demand. Cash cattle in the U.S. traded at US$118 per cwt., up $2.

The estimated Nebraska cash-to-futures basis is +$3.43, compared to +$2.65 last year.

The weaker loonie should support prices in Canada.

There is cautious optimism that the lows are in for the futures market, but given the supply-demand dynamics of increased fed supplies and historically large carcass weights in Canada, prices could be slow to rally.

Cows rise

Western Canadian cow prices are now at the highest level seen since the middle of June and are also at a premium against Ontario and the U.S. utility cow market.

D1, D2 cows ranged $91-$110 to average $101.08, up $1.78. D3 cows ranged $82-$98 to average $88.67.

Rail grade cows were $190-$195.

Slaughter bulls were $122.83, down $1.58.

Western Canadian cow slaughter totalled 4,160 head, marking the second consecutive week where slaughter trended below a year ago.

The Ontario cow market has struggled as of late, likely related to dry conditions, because prices are only 25 cents above annual lows set in May.

Pastures are in good shape in Western Canada, but some cow-calf pairs might be split in the coming weeks.

Second half highs are anticipated to occur over the next 30 days before drifting lower into the fall.

Feeder prices mixed

With the August holiday, auction volumes totalled a meager 4,600 head.

Prices through commercial auctions were mixed with light volumes and varying quality influencing prices. Feedlots have been slow to replenish inventory.

Cheaper barley and negative margins on feeders bought today have feedlots keeping the cattle already in their lots, feeding for more days.

Alberta and Saskatchewan feedlot placements have been down year over year with May down 20 percent and June down 16 percent.

Heifers 850 lb. traded at prices more than $21 lower than steers, the widest spread so far this year.

Look for this spread to narrow on the heavier feeders in the coming weeks.

Alberta calves and feeders in July were at a premium over the U.S. market. Canadian feeder exports totalled 1,340 head compared to 4,468 head last year.

Steers heavier than 900 lb. have strengthened from July to August in 13 of the past 16 years. The average increase was five percent in those 13 years. If that trend holds, it would put steers on track to average in the mid-$170s in August.

Strengthening cattle futures and the softer Canadian dollar should support prices.

Cow-calf pairs were $1,800-$2,500.