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 sets record
Over the span of six weeks the Canadian dollar has declined roughly five percent, while fed cattle prices have chopped sideways, averaging in the low $180s per hundredweight. In general, the fed market is always slow to adjust for currency, which has resulted in weaker basis levels. For the start of October, both the cash-to-cash and cash-to-futures basis are the weakest since 2005.
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Weaker basis levels aside, the fed market set a new record price high for October. It is very uncommon to see annual highs in October. It has only happened three times (1988, 1993, 2003) in the past 30 years. From a seasonal perspective, higher prices are still in front.
Light trade was reported last week, and dressed sales in Alberta and Saskatchewan ranged from $300-$304 per cwt. delivered. Cattle were being scheduled for the middle of November delivery.
U.S. packer interest was noted, and a few cattle were marketed south. Some producers were reluctant to market cattle into the United States because trucks are in tight supply.
Averaging 963 pounds, western Canadian steer carcass weights are only eight lb. shy of their all-time record set in November 2020. Over the past two weeks, heavyweight carcass discounts have been noted. Packers are discounting carcasses weighing more than 1,025 lb.
In Ontario, dressed sales were reported at $303 per cwt. delivered, fully steady with the previous week. Cattle were being booked for the week of Oct. 24 delivery.
Cattle feeders are in a tough spot. Weak basis levels are traditionally a signal for producers to slow marketing rates and keep cattle on feed, but barley prices continue to rise, and the cost of adding additional weight to finished cattle is tough to justify.
In the U.S., dressed sales in Iowa and Nebraska were at mostly US$230 per cwt., $2 per cwt. higher. Live sales in Nebraska ranged from $145-$148 per cwt., steady to $2 per cwt. higher. Sales in Texas and Kansas were at $144 per cwt., $1 higher.
U.S. steer byproduct values have strengthened and are at the highest point this year. Beef exports for August were one percent larger than last year. Year to date, the top three markets for U.S. beef are Japan, South Korea and China.
In August, U.S. beef imports were down 19 percent year over year. Lower beef imports were reported from Australia and Brazil.
Cow prices steady
Non-fed prices traded steady to stronger last week. D2 slaughter cow prices were steady, averaging $103.93 per cwt., and D3 cows firmed $2.60 per cwt. higher to average $90.75. Dressed cow bids trended sideways from $203-$207 per cwt. delivered. Butcher bull prices continue to test annual highs and traded fully steady with the previous week at $132.64 per cwt. Slaughter bull exports to the U.S. for the week ending Sept. 24 were almost 16 percent larger than a year ago at 1,309 head, and year-to-date volume was nine percent larger, totalling 30,580 head.
Good export demand continues for Canadian non-fed cattle and is price supportive. Seasonally larger salvage cow offerings are anticipated, and slaughter cow prices could trend steady to softer.
Auction markets busy
Alberta feeder prices were pressured modestly lower last week as auction offerings trended larger. Small calves lighter than 500 lb. traded generally $4-$6 per cwt. lower than the previous week. Larger calves from 500-700 lb. traded mixed with steers modestly lower. Lesser-converting heifers slid $8 per cwt. lower. Larger feeders heavier than 700 lb. traded unevenly lower on deteriorating lot size and quality.
Total Alberta auction volumes were 27 percent larger than the previous week at 47,678 head and were five percent smaller than the same week last year.
Feeder offerings at auction are expected to rally larger this month, and prices should ease modestly and track the historic downward trend throughout the fall run. With cautious buying and lower purchase costs, feeding margins for fall calves could be improved, but feed costs are eroding feedlot profitability.
U.S. cutouts opposite
In U.S. beef trade, cut-out values ended last week trending in opposite directions. Choice cutouts rebounded slightly from last week to close at US$247.36 per cwt. Select cutouts continued weaker, closing at $216.99.
