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 price lower
The Chicago live cattle futures contract fell four percent last week and came close to the year’s low that had been set in late April.
Retailer beef buying for the July long weekend was wrapping up, and the dog days of summer, when U.S. beef demand seasonally weakens, are fast approaching.
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Fed cattle cash prices also fell on both sides of the border.
In Alberta, light trade early last week was mostly steady with the previous week, but bids deteriorated rapidly and late week dressed sales were down $10-$13 per hundredweight.
Most of the trade mid-week was $252-$255 delivered, and at the end of the week the price had fallen to $237-$238.
The Canfax live steer average was $152.84, down $3.55 per hundredweight.
The trade was in steer calves. Heifers are not expected to hit the market for a couple of weeks.
The weekly Alberta cash-to-Chicago futures basis firmed to a seasonally strong 65 cents per hundredweight.
Western Canadian fed slaughter for the week ending June 11 was not available.
Fed cattle exports to the U.S. for the four-day Memorial Day week ending June 4 were down 20 percent to a modest 1,738 head.
For the year, exports are up 43 percent.
The current bear futures market will weigh on the cash market.
Carcass weights are expected to seasonally trend larger, and market-ready supplies should increase.
In the U.S. last week, live sales fell US$5-$8 per hundredweight in the south at $120-$123.
Northern live trade was mostly at $119-$121. Dressed sales were $5-$14 lower in a wide range of $191-$198 delivered.
Cow price down
Following three consecutive weeks of higher prices, Alberta D1, D2 cows fell C$2.25 per hundredweight.
D1, D2 cows ranged $$95-$110 to average $102.40, and D3 cows ranged $84-$100 to average $91.75.
Rail grade ranged $190-$195 per hundredweight.
Alberta non-fed prices have been stuck in an $11 trading range since the beginning of the year, while the eastern Canadian market has been a bit more volatile.
Since the lows at the beginning of May, Ontario D1, D2 cow prices have rallied 13 percent, and prices are only $4.50 shy of the highs hit in January.
With record setting calf prices during 2015, many producers last year wanted to get one more year out of a cow that would have traditionally been culled.
With calf prices forecasted to be down this year, optimism is not as brisk and producers have re-turned to a more normal culling program, which helps explains the year over year increase in cow slaughter.
Feeders weaken
The Chicago August feeder cattle contract hit a three-year low last week as corn prices rose on fears that July in the U.S. Midwest might prove hot and dry, stressing corn.
Cash feeder prices in Canada held on fairly well, considering that the August feeder futures contract from June 9-16 fell 5.7 percent. The cash to futures basis strengthened.
The 750 pound steer basis level was +$14.02, the strongest this year, while the 850 lb. basis of -48 cents was the second strongest level.
The price slide from a 450 pound animal to 650 pounds is much less than it was last year. Buyers want to buy the weight rather than feed to a heavier weight.
Grass conditions are still a concern in some drier areas.
Most feeder cattle at market are from background lots, but there have been a few packages of grass cattle at market.
Also, there have been a few exposed heifers at commercial auctions. They met weak interest because bred heifers are trading out of season. Most were placed into feedlots.
Export volumes to the U.S. for the past seven weeks have trended above year ago levels.
Continued weakness in the Chicago live and feeder futures market and a sharp fall-off in the western Canadian fed market does not bode well for the Alberta feeder market this week.
Beef down
U.S. boxed beef prices fell last week with Choice down $3.37 at US$223.48 per hundredweight and Select down nine cents at $202.75.
The Choice-Select spread has been record wide in recent weeks, reflecting a strong preference at the retail and restaurant level for Choice cuts.
With the seasonal decline in beef last week, the spread narrowed to $21 from $24 the previous week.
Weekly Canadian cutouts to June 10 saw AAA down 60 cents at C$286.67 per hundredweight and AA down $1.89.
The Canadian dollar rose to 78 cents that week from 76 cents, and the AAA-Choice spread narrowed to -13 cents from -$4.17 while the AA-Select spread improved to $8.20 from $3.77.
