FED CATTLE STEADY
The Canfax weighted average steer price was $144.02 per hundredweight, down 15 cents. Heifers were $143.18.
Fed cattle prices have traded in a narrow range for three weeks. Packers are slaughtering at an aggressive pace, which is supportive to prices.
Packers are enjoying healthy operating margins, encouraging them to slaughter on Saturdays.
Steer slaughter in Western Canada topped 32,500 head two weeks ago, the most in the past eight years.The bid spread between the two major Alberta packers was $5 dressed at the beginning of last week, but the difference narrowed as the week progressed.
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Cattle bought last week were scheduled for delivery in the first half of August.
Carcass weights are rising, but grades are not improving. Canadian AAA and Prime as a percent of all A grades was just over 50 percent compared to about 62 percent last year.
The fed export pace in the last nine weeks has exceeded last year’s pace. Exports have exceeded last year by a total of 20,000 head since mid-May.
Cash cattle in Kansas and Texas sold at US$120 per cwt. July 21, steady with the previous week.
COWS DOWN
D1, D2 cows ranged C$95-$112 to average $102.29, down $4.71.
D3 cows ranged $85-$100 to average $91.58.
Rail grade cows ranged $193-$198 delivered. Slaughter bulls averaged $120.33, down $5.17.
Weekly non-fed slaughter to July 15 rose 26 percent to 6,729 head. Slaughter is up nine percent for the year. Weekly exports to July 8 were 3,285. Exports are down 26 percent for the year,.
Producers are concerned about dry weather. However, there has not been a lot of culling.
FEEDERS DOWN
Feeders lighter than 700 pounds, which would be sold into the second quarter of 2018, were sharply lower.
Feeders heavier than 700 lb., which would be sold in the first quarter of 2018, were steady.
There was buying interest from the United States and Eastern Canada.
Volumes at auction have been seasonal even with the hot, dry weather, which has caused pastures to deteriorate. Sales are up 18 percent for the year.
Exports in the holiday-shorted week to July 8 were small at 1,418 head. Exports are down 42 percent for the year.
The usual summer auction slow-down should end soon, and numbers should start to climb.
Issues such as feed costs and the value of the loonie will as usual determine price trends.
Barley prices have rallied about 50 cents a bushel in the past four weeks with an estimated $10 per cwt. impact on 550 lb. steer prices.
Cow-calf pairs ranged $1,800-$2,700.
U.S. FEEDLOT NUMBER JUMPS
The monthly U.S. Department of Agriculture report was considered bearish. The drought in the U.S. Plains forced more cattle off grass, and feedlots, enjoying good profit margins, were happy to buy.
The number of cattle in American feedlots was 10.821 million, up four percent. The market expected a 2.9 percent increase.
The last time there was a month-over-month increase of more than four percent was in 2011.
Placements in June were 1.77 million, up 16 percent from last year. The market expected an increase of only 6.1 percent.
It was the largest June increase since that month in 2006.
Marketings in June were 1.989 million, up four percent. The market expected a 4.7 percent increase. That was the largest for the month since 2011.
Feedlots are buying lighter animals as placements increase. Placements under 800 lb. were up 27 percent.
BEEF EDGES LOWER
The July 20 Choice cutouts partly stabilized at US$207.65, down only $2.20, and Select was $195.58, down $1.68.
U.S. retailers prominently featured grilling items, which has helped to encourage more meat dining at home. Summer beef sales at restaurants have suffered as a result.
In Canada, the AAA price July 14 was C$277.46, down $8.76, and AA was $255.74, up $11.37.
