Canfax Report for February 23, 2012

Fed cattle prices up

Speculative funds invested in cattle futures driving prices to record highs.

Reduced slaughter helped drive cutouts higher. Together, these factors drove fed cash prices higher.

Fed steers average rose $1.82-$112.61 per hundredweight and heifers were $113.16, up $2.40.

U.S. packers showed interest.

Rail trade was fairly consistent at $191 cwt. delivered.

The cash to futures basis tightened to -$13.86 from -$14.22 the previous week.

Stronger prices encouraged selling, making feedlots current.

Weekly fed exports totalled 6,267 head, down 10 percent from the previous week. Year to date fed exports are down 38 percent.

Canadian market-ready supplies should remain manageable. The basis should strengthen in March when demand picks up.

With the strong premium in the April contract and lower U.S. fed slaughter, cattle in U.S. feedlots are getting backed up. U.S. steer and heifer carcass weights are at record high for this time of year. Feedlot currentness will need to be monitored.

Cow prices rise

D1, D2 cows rose $1 per cwt. Packages of high yielding cows are trading up to $80 per cwt.

Over the past two weeks, the average D3 cow price has increased $3.

Rail bids strengthened $2 to $140-$146 per cwt. delivered.

The Canfax average bull price rose to near $85 per cwt.

Weekly nonfed exports to Feb. 4 totalled 4,051, up 27 percent from the previous week. Domestic packers may have to force bids higher to remain competitive with U.S.

Feeders steady to stronger

Feeder values were static with price resistance becoming evident. Financial risk in placing cattle is high.

Buyer demand for grass cattle was intact with 300-600 pound steers and heifers trading steady to $1.40 higher.

The Canfax average steer price rose 24 cents and heifers climbed 63 cents.

Volumes of 700-900 lb. feeders increased, but prices held firm.

Buyers are discounting heavily conditioned cattle, whereas demand for light to moderate conditioned feeders is strong.

The average 900 lb. and heavier steer and heifer price rose $1.40-$2.35. Auction volumes totalled 30,609, down 15 percent from the previous week.

Weekly feeder exports to the United States to Feb. 4 totalled 1,724. Year to dates feeder exports are up 49 percent.

Strong U.S. feeder prices will ultimately support the Canadian market. High performing packages of feeders are testing the top end of the Canfax price ranges.

Beef prices rise

Processors pushed beef values higher. U.S. cutouts closed $3 per cwt. higher.

Some analysts warn that U.S. retailers are having trouble moving beef at these prices.

Weekly Canadian cut-out values to Feb. 10 were mixed. Montreal wholesale for delivery this week was steady at $211-$213 per cwt.

Canadian cattle on feed

There were 942,845 head in Alberta and Saskatchewan feedlots with capacities of 1,000 head or more on Feb. 1, up three percent from last year.

Placements in January were 95,729, up six percent. The increase was all steers as heifers moved into the breeding herd.

Marketings in January were 141,725, down one percent.

Markets at a glance

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