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 sluggish
The fed market lacked buyer competition last week and uninspiring bids failed to motivate sellers. A weekly price trend for steers was not established. Dressed heifer prices corresponded with thin steer trade at $298-$300 per hundredweight delivered and were generally $2 per cwt. lower than rail sales seen the previous week.
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U.S. bids of US$232 per cwt. delivered got a mixed reception with a handful of local cattle trading south. All three local packers were expected to add a Saturday shift this week to make up the Monday Thanksgiving holiday.
Very light Ontario cash trade was reported from $303-$306 per cwt. delivered but a repeatable weekly market trend was not fully established.
Trade activity was limited and a significant portion of the showlist was rolled over into this week. Cutout values appear to have bottomed and are seasonally expected to gain momentum and a leverage shift favouring U..S cattle feeders should encourage stronger North American fed prices.
Last week’s estimated cash-to-cash basis was around -$24, the weakest since the mid-2000s, and combined with the soft Canadian dollar should fuel more aggressive U.S. buying interest. Locally, market ready packer inventories are ample.
In the U.S., business got off to a slow start last week with the bulk of trade developing on Thursday. Southern live sales were generally US$1 per cwt. stronger than the previous week at $145 per cwt. Northern trade was $1-$2 per cwt. higher than the previous week from $146-$148 per cwt. live and most dressed sales were reported at $230-$232 per cwt. delivered.
Good beef demand and current feedlot supplies have shifted leverage toward cattle feeders and cash prices are expected to strengthen modestly.
Cow prices steady
Non-fed prices have been steady. In Alberta, cow prices have been trading on either side of $104 per cwt. while butcher bull prices have been hovering around $130. For the middle of October, this is the third highest cow and bull price on record.
Last week D2s averaged $104.20 and D3s averaged $89.92 per cwt. Butcher bulls averaged $129.89.
Anecdotally, there are a lot fewer bred/exposed cows entering the slaughter mix compared to last year. This is usually the time that speculative buying interest begins to pick up on the non-fed market as buyers take advantage of larger volumes. So far, large volumes have not materialized, and prices have remained strong, keeping speculative buyers on the sidelines.
Over the past month, U.S. cow prices have declined around US$5 per cwt. In addition, 90 percent trim prices have also been under pressure, setting new lows for the year.
Feeder heifer price down
Calf and feeder prices have hit a rough patch, with heifers seeing the largest declines. Over the past two weeks, on average 500-700-pound steer prices have declined $7.25 per cwt. while heifer prices over that same time have dropped $11.50. In B.C, Alberta, Saskatchewan and Manitoba, the largest year over year price increase is on 300-400 lb. steers, with prices up $57-$60 per cwt.
These lightweight steers are far from hitting the fed market, but if they are backgrounded and turned onto pasture, they might be priced against the December 2023 (US$159.25 per cwt.) or February 2024 (US$162.50 per cwt.) live cattle contract.
Western Canadian packers are likely not offering basis contracts that far out, but that aside, the futures market is pricing in a lot of optimism, pointing to higher prices.
Canadian feeder exports totaled 1,757 head, 64 percent lower than last year and 22 percent lower than the five-year average. This is the sixth week in a row that Canadian feeder cattle exports have been below last year.
Canadian feeder imports from the U.S. for the month of August totaled just over 21,000 head, the second largest monthly import volume seen this year.
Last week the forward delivery market was lightly tested. Alberta 875 lb. steers for February 2023 delivery traded in the low $230s per cwt.
U.S. cutouts steady
In U.S. beef trade, cutouts ended the week trending along seasonal norms, with both Choice and Select cutouts continuing stronger than the five-year average. Choice cutouts ended the week at US$246.53 per cwt., while Select cutouts closed at $215.86. Both Choice and Select cutouts are steady with last week.
