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Canfax report

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 steady

The Canfax fed steer weighted average was $160.84 per hundredweight, up 75 cents, and heifers were $154.41, down 74 cents.

Most dressed sales were active in a tight trading range of $267-$270 delivered.

Both federally inspected Alberta slaughter plants were in the cash market last week. Prices were weaker for deferred delivery.

A significant volume of clean-up yearlings were marketed.

The weekly cash-to-futures basis weakened $4.50 but remained seasonally strong at +$1.59.

Western Canadian fed slaughter for the four-day kill week ending May 28 was down 21 percent at 28,271 head.

Total slaughter is running four percent behind last year at this time.

Weekly fed exports to May 21 fell 35 percent to 3,896 head. But for the year, exports are up 44 percent.

Most yearlings are now sold, and market-ready fed calf inventories are fairly current, although larger supplies are expected soon.

The seasonal price trend from now to the end of July is lower, but in five of the past 10 years June fed prices have risen.

Trade in the U.S. cash market did not develop until Friday. Live sales in the southern United States were up about $3 at US$128, and dressed sales in the north rose $4-$8 to $206.

Futures were significantly undervalued relative to cash price, and analysts think improved grilling weather in the U.S. should spur beef demand.

American feeders have been marketing steadily to try to reduce the number of cattle that will be market-ready during the usual slack period in mid-summer.

Cows rise

Many producers are making their final culling decisions and will soon turn cattle out to pasture.

The culls increased the numbers at auction, but there was good packer demand, helping lift prices.

D1, D2 cows ranged $94-$110 to average $102.50, up $2.50.

D3 cows ranged $84-$100 to average $93.38, up about $4.

D1, D2 prices are $45 lower than the same time last year, but they are in line with the four year (2012-15) weekly average.

This year, cow exports to the U.S. are up four percent, while butcher bull exports are down 28 percent.

Record high prices for slaughter bulls last year encouraged producers to cull mature bulls and bring in new bulls at a reasonable cost.

Also, Canadian packers have been active buyers, and bull slaughter is up 74 percent over last year.

Feeders steady

Most producers have bought what they need for the grazing season.

This is the time of year when heavier feeder prices usually start to rally because bigger cattle are no longer being placed against the traditionally sluggish summer-early fall fed market.

In seven out of the past 10 years, 850 pound steers have strengthened from May to June.

The average increase was four percent. That would put 850 pound steers in late June at about $183.

To achieve that four percent increase this year would require a rally in the December Chicago life cattle contract.

Weekly feeder cattle exports totalled 8,092 head, the fifth consecutive week where exports have trended above year ago levels.

Barley bids have weakened, pressured by softer demand from feedlots and the export market.

Beef buying picks up

Signs are that beef sales for the U.S. Memorial Day weekend were good. It, along with the July 4 and Labor Day long weekends, are critical for beef demand. Memorial Day weekend in 2014 accounted for 100 million pounds of beef sales.

Choice cutouts June 2 were US$223.28, up 56 cents, and Select was $201.41, down $1.85.

Canadian cutouts to May 27 were AAA at C$277.95, up $2.18, and AA at 265.25, up $3.12.

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