Canfax report

Fed prices rise

Trade started out slow but fed cattle prices were higher.

Rail prices rose $1-$2 per hundred weight higher.

Live fed steers averaged $119.86, up 95 cents, and heifers averaged $119.06, up $1.99.

Cash trade was generally light. Feedlots have marketed cattle aggressively and also have contracts to fill. However, cash trade volumes could increase this month.

The Canadian cash market was stronger than the Chicago live cattle market. Also, the loonie was a little higher.

This caused the Alberta cash-to-futures basis to strengthen dramatically to -$5.70. In the last 15 years in July, only 2011 and 2008 had basis at -$6 or better.

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Weekly fed cattle exports to July 13 were 3,568 head, down 37 percent from the same week a year ago.

Year-to-date exports are three percent higher than the same time last year.

The weighted average steer price has dropped only $4 per cwt. from the spring high this summer. However, market ready supply is expected to increase seasonally, pressuring prices later this month and in September.

Cows fall

Butcher cows were steady to $1 lower last week but are generally 50 cents higher than the same time last year.

D1, D2 cows ranged $75-$85 to average $79.43 per cwt. while D3s ranged $67-$78 to average $71.60.

Rail grade cows were $150-$155.

Exports continue above year ago levels.

Prices usually weaken into late summer but should enjoy good support this year. With grass conditions in generally good shape across much of the Prairies, marketing pressure should be limited.

Non-fed volumes should tighten moving into August, and annual highs could be broken.

Feeders rise

Bullishness in the feeder market has come from tight feeder supplies, falling barley prices, attractive live cattle contracts and strengthening futures market.

Seasonally, feeder volumes are light, but buyers have actively bid on what is offered.

Steers and heifers 800 pounds and heavier are setting new highs for the year. That is rare. In the past 12 years, 850 lb. steers have never posted annual highs during July.

In eight of the past 12 years, annual highs have occurred during the second half of the year, and the high was set in August in four years.

Steers 900 lb. and heavier are $5 above last year and are only at a $3.22 discount to eastern Canadian values.Weekly Alberta auction volumes fell 24 percent to 7,782 head.

Weekly feeder exports to July 13 totalled 2,840.

It is not uncommon to see the steer-heifer price spread narrow this time of year. Last week, the 850 lb. price spread was about $7.50 per cwt., which was the narrowest the spread has been this year.

Strong prices will bring some yearlings off grass earlier than normal.