Surprise rally in cattle
Fed cattle price averages were $3 per hundredweight higher last week, said Canfax.
Canadian markets played catch-up with the surprising strength in the United States market, where some packers found themselves with inadequate supply and panicked, pushing prices higher. American packers the previous week had slowed their kill lines to try to force beef prices higher and cattle prices lower. They were holding out on buying more cattle last week in expectation that the price would drop, but then found they didn’t have enough to meet commitments and were forced to pay for supply.
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Canadian packers scrambled to keep their bids in pace with the U.S. as the basis suddenly widened, said Canfax.
About 22,500 head traded, seven percent more than the week before. A few more sales of animals younger than 21 months occurred, with most fetching a $30 per head premium.
Alberta prices Aug. 10 saw steers bring $84.50-$88.90 per cwt., flat rail $140.25-$143.40 and heifers $86-$88.90, flat rail $142.
Canfax said August rallies are rare and it is hard to say how long it will last.
The supply of market-ready animals in Western Canada is not a burden and packers will have difficulty finding much more for supply in the weeks ahead. Canfax said feedlots will not be willing to give back any of this price improvement soon so solid pricing should continue through the rest of the month.
Beef steady
The Calgary wholesale market for delivery this week was steady at $141-$142, said Canfax.
Inventories of middle meats remain tight largely due to the small kills this summer. Imports of beef from the U.S. are running at more than twice the pace of last year.
In the U.S., cutouts have made a substantial rally in August with choice prices up $8 US per cwt. and select up $14 in two weeks. Beef movement has been limited, but interest should pick up as retailers put together Labour Day inventory. The choice-select spread narrowed to $11 per cwt.
Feeder averages down
Last week’s feeder price averages did not reflect the strength that appeared late in the week, said Canfax.
For the week, feeder steers 800-900 pounds and heavier were down $1-$1.75 per cwt. and heifers 800-900 lb. down $1 while 900 lb. and heavier were up $1.
Light steers and heifers 300-600 lb. were steady to $1 lower. Steers 600-800 lb. were steady while heifers 600-800 lb. were steady to $1.75 higher.
The TEAM and the satellite sales Aug. 4 contributed 7,150 head to volume. Alberta auction market volume was up 16 percent from the week before and up three percent from 2005, said Canfax.
Feeder exports have started to dwindle with about 1,900 head exported the week of Aug. 5.
Butcher cows held steady last week and butcher bulls rose 75 cents.
Canfax said feeder volumes should pick up with the fall run around the corner. Given the strong fed market, demand should be good for heavy feeders because pens need to be filled.
In light trade bred cows of medium quality were $450-$750 and medium quality bred heifers were $500-$750. Cow-calf pairs were $900-$1,350, with plain types $550-$850.
Cattle on feed
Slightly more than 802,000 cattle were on feed in Alberta and Saskatchewan on Aug. 1, said Canfax. That was up 13 percent from 2005 and seven percent larger than in 2002, but six percent lower than Aug. 1, 2001.
On feed numbers declined nine percent from the month before.
The slaughter and export for slaughter in July for Alberta and Saskatchewan was 219,022 head, up two percent from the year before. Marketings in the Canfax on-feed survey group, consisting of all feedlots over 1,000 head, were up four percent over last July. While Canfax group marketings were larger than in 2005 and 2004, they were smaller than in previous years.
Placements in July were 25 percent larger than in July 2005, and second only to 2002 when 137,000 were placed. Slightly earlier yearling movement was seen as feeders heavier than 700 lb. showed the largest increase.
Hogs steady
American hog prices maintained strength last week despite falling pork prices and poor pork plan margins.
Hog supplies were improving as the weather cooled after an intense heat wave. The heat slowed weight gain, knocking four pounds from carcass weights in the western corn belt.
The Iowa-southern Minnesota live cash price for hogs delivered to plants climbed to $52 US per cwt. Aug. 11, up from $51 Aug. 4.
The composite pork carcass cut-out value rose early in the week but fell to $72.97 by Aug. 11, down from $73.50 Aug. 4.
Federal slaughter in the U.S. was estimated at 1.89 million last week, down from 1.9 million the week before.
Lambs stronger
Ontario Stockyards reported 892 sheep and lambs and 92 goats traded last week. Light lambs were steady to stronger with heavier lambs $10 Cdn higher. Sheep and goats sold steady.
Bison under pressure
Canadian rail carcass prices for top quality bison bulls younger than 30 months and in the desirable weight range are $1.70-$1.90 per lb. The Saskatchewan Bison Association said there has been downward pressure on price averages, which have fallen by about five cents per lb. due to the seasonal decline in demand for some cuts.
Lower exchange rates continue to challenge profitability for Canadian marketers selling into the U.S.
Hot hanging weight bison bulls younger than 30 months showed a weighted average of $179.52 US per cwt., according to the July 10 U.S. Department of Agriculture report.
