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 cattle trade light
Cash offerings are light because feedlots had to manage their risk earlier this year by forward pricing a lot of their fed cattle.
Feedlots are current in the marketing of the cash cattle they have and they are not overly motivated sellers.
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When trade developed midweek, dressed prices were steady to $2 per hundredweight higher than the week before. There was little trade with the Thanksgiving long weekend cutting into slaughtering days.
Live bids were not reported and most sales were dressed, fob the feedlot.
Weighted average steer prices rose 95 cents to 118.79 per cwt. while heifers were $118.11, up $1.35.
Volume sold was 8,513 head, down 33 percent from the week before and down 46 percent from the same week last year. U.S. buyer interest in Canadian cash cattle was quiet, as was the Saskatchewan fed market.
The Alberta cash-to-futures basis weakened 54 cents to -$14.47. That was -$2.36 weaker than the long-term October average.
Weekly western Canadian fed slaughter to Oct. 5 fell two percent to 33,225 head.
Fed cattle exports were unavailable because of the U.S. government shutdown. Stagnant beef demand has forced packers to slow chain speeds to reduce negative margins.
Packers own good inventory and with slower kills expected, cash market will likely remain quiet.
Cow values strong
D1, D2 cows ranged $74-$84 to average $78 and D3s ranged $65-$74 to average $69.83.
Rail grade cows ranged $149-$154.
Western Canadian non-fed slaughter totalled 7,008 head, the most since the beginning of May.
With the calf run in mid-stride, non-fed volumes at commercial auctions have increased.
Prices are seasonally strong and many speculators and seasonal buyers are on the sidelines awaiting lower prices.
The seasonal lows are likely not in yet but non-fed marketing is current, limiting the downside market risk.
Record feeder futures
Feeder futures in Chicago reached record highs on concerns about tight supply, made worse by the large number of cattle killed in South Dakota in the recent blizzard.
Feeder auction volume compared to last year in Alberta was up 81 percent and in Saskatchewan up 70 percent.
With 40,000 head at auction in Alberta, feeder prices traded strong with good North American feedlot demand.
While futures set contract highs, feeder basis levels (the Canadian cash market to the futures) are weak indicating that the new amendments to U.S. country of origin labelling regulations are being priced into the market.
The yearling market showed counter seasonal strength as steers and heifers 800 pounds and heavier rose $1-$4.
Alberta 850 lb. steers set new highs for the year. Only once before in the past 13 years, in 2011, have 850 lb steers set highs in October.
Yearling market strength is surprising given current fed contracts for the first part of 2014 are not robust.
The Tyson packing plants at Lexington, Nebraska, and Pasco, Washington, are scheduled to slaughter only B class fed cattle (Canadian feeders, fed in the U.S.).
Partial loads in electronic sales are being discounted. Truck supply could be an issue soon, so flexibility with delivery dates should also be considered.
The calf market looked stronger by the end of the week while yearling prices were about steady.
U.S. beef mixed
With USDA reports unavailable, Canfax is using Urner Barry information. It said the U.S. boxed beef cutout traded steady to higher with Choice down 14 cents per cwt. and Select up $1.26. Given the partial government shutdown, buyers appeared to be cautious.
Weekly Canadian cutouts to Oct. 4 were down $2.15-$2.40 per cwt. with AAA on Oct. 4 at $190.28 and AA at $182.33.
The Montreal wholesale price was up slightly at $225-$226.
Canadian cattle on feed
There were 722,814 head of cattle in larger Alberta and Saskatchewan feedlots on Oct. 1, up eight percent over last year and one percent higher than the five-year average.
Placements in September were 254,138, up 12 percent over last year. Steer placements were up 28 percent while heifers were down one percent.
Marketings in the month were 142,737, up 10 percent from last year. However, that was 12 percent below the five-year average.
Other disappearance was 4,775, down six percent.
