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 cattle soar
Here is one for the record books.
The Canfax weekly average for steers soared $14.09 to $191.51 per hundredweight and heifers were $184.52. The prices were the strongest since July 2015 and were supported by extremely tight supply of market-ready cattle in the United States, the snow and rain in the U.S. that caused muddy feedlots and the weak Canadian dollar.
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The U.S. is enjoying strong beef exports, which also helped lift cattle prices. March U.S. beef exports totalled 234 million pounds, up 13.9 percent from February and up 25.2 percent from a year earlier.
March beef and veal exports to Japan were up 43 percent over last year, and shipments to South Korea rose 27 percent. U.S. beef captured some business normally done by Australia.
American packers, short on supply, stepped into the Canadian marketplace. They bought a large part of the week’s offering at dressed prices of US$242 for immediate delivery.
A handful of cattle traded at $232 for mid-May delivery.
Alberta dressed trade was C$7-$14 per cwt. higher at prices C$305-$310 delivered. Most of the local procurement was scheduled for two- to four-week delivery.
Because cattle are being pulled forward, carcass weights were 23 pounds lighter than the previous week and 55 lb. lighter than last year at the same time.
This gives feeders huge leverage over packers because they can hold back cattle until they get the price they want. As well, packers have to buy more lightweight cattle to maintain beef production.
The weak Alberta-to-Nebraska cash basis contributed to the American buying interest. The basis was -$7.78.
Weekly western Canadian fed slaughter to April 29 rose to 35,054. Slaughter is up five percent this year.
Weekly exports to April 22 rebounded to 5,385 head. They are down 10 percent for the year.
The surge of U.S. buying interest is unlikely to last as the basis shifts and packers in the northwestern U.S. gain access to increased volumes of captive cattle.
The rally in fed cattle has also lifted beef prices, and the market will watch to see if consumers suffer sticker shock right at the point when beef demand usually rises for barbecue season.
Chicago cattle futures rallied strongly last week but ran out of steam as the week closed.
Cash slaughter cattle in the U.S. sold at US$140-$147 per cwt., up from $136- $140 the previous week.
Cows strong
D1, D2 cows ranged C$103-$118 to average $110.80, up $3.05.
D3 ranged $95-$106 to average $100.38.
Rail grade cows were $205-$210.
Alberta cow prices established new highs, while U.S. cows slipped from highs set a couple of weeks ago. Alberta packers seem to be giving up a little margin on the non-fed cattle.
Recent data shows 85 percent trim prices are three percent higher than last year, while butcher cow prices are six to eight percent stronger.
Nevertheless, packers will likely have to be aggressive buyers to keep hooks full because fed cattle supplies are tight and more fed cattle are expected to go to the U.S.
The weekly Canadian bull slaughter volume was 430 head, the most since September 2012.
Feeders jump higher
Feeders saw the largest weekly price gain in recent history.
Calf and feeder prices traded at the highest levels since early April last year.
Fall-purchased calves that were placed into backgrounding lots have now been on feed for more than 150 days.
Many producers are marketing their feeders ahead of schedule and at lighter weights than last year. Backgrounded cattle are fetching profits of about $400 per head.
Demand for replacement quality heifers was mixed. Premiums were noted for top sort reputation females.
On the other hand, a higher percentage of group or load-lot packages of heifers with “breeding potential” are being placed on feed.
The forward delivery market was lightly tested.
Alberta and Saskatchewan steers weighing 1,000-1,025 pounds for August-September delivery saw prices in the low to mid-$180s.
Using a .10 slide, 850 lb. basis levels are working back to -$6.25 to -$11 at the ranch.
The five-year average 850 lb. basis for August is -$11.40 and September is -$7.22.
The recent stronger prices have changed some producers’ marketing strategies.
Some cow-calf producers and grass operators are doing weight and quality sorts, which has brought a few more feeders onto the cash market.
American feedlots are looking at new crop corn prices that are 10 percent less than at this time last year, holding the potential for good profits for the rest of the year.
Bred cows ranged $1,500-$2,400 per head. Cow-calf pairs ranged $1,900-$3,050.
Beef takes flight
Choice rose US$16.43 to $235.58 per cwt., and Select jumped $10.16 to $216.84.
Prices are now $21-$31 per cwt. higher than a year ago.
The sharply higher prices may have reduced sales, but demand is expected to remain strong as consumers gear up for the grilling season.
Weekly Canadian boxed beef prices to April 29 were unavailable.
