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.
Strong fed basis
The big news this year is the continuing strong cash to futures basis levels in Canada and the U.S.
The futures market has been anticipating lower fed cattle prices because of the larger numbers on feed but good demand and strong cash prices supported strong basis levels. This has encouraged feedlots to market cattle more aggressively and some have moved ahead of schedule before the largest volumes come to the market this summer. As a result carcass weights are down to moderate large beef supplies.
The Alberta cash to futures basis has averaged $10.67 per hundredweight and has been positive every week so far this year.
In addition there has been a positive cash to cash basis between Alberta and Nebraska. Although the premium has narrowed since the beginning of the year, Alberta prices have generally been $2-5 per cwt. higher than Nebraska. Year to date, Alberta prices have averaged $4.55 per cwt. premium to Nebraska, compared to last year when their $2.82 per cwt. discount and the five year average for these same weeks was minus $9.15.
Seasonally, the five year average for the cash to cash basis in July is just below -6, about $3 weaker than June.
In Canada, Ontario prices have been below Alberta throughout the winter and spring, but have recently moved to a premium to Alberta.
Fed steers price drop
Weighted average steer prices dropped 75 cents per cwt. and new annual lows were established for the week ending June 8.
Fed prices are trading 11 percent below last year whereas AAA and AA cutout values are six to eight percent lower than last year. This suggests healthy packer margins.
Western Canadian fed slaughter totaled just over 40,500 head, the third largest weekly slaughter volume seen this year. Sale volumes were moderate with all three western Canadian packers buying cattle this week. Dressed sales were reported from $238-242 per cwt. delivered.
Live Alberta steers traded between $139-142 per cwt. while Ontario offered $132-150 per cwt.
Last week 83 percent of cattle were sold on a carcass basis.
On a cash to cash basis, this is only the second time since early December that Alberta fed prices have been at a discount against the Nebraska market.
The Ontario fed market was also at a premium to Alberta for the first time this year.
Feeders trending higher
Feeder calves were $2.50 per cwt. higher this week with good interest observed for grass types. Steer calves between 400-600 lb. saw prices rebound $6-7 higher than the previous week and similar weight heifers trended $3.50-6.50 higher averaging around $220 per cwt.
With the exception of 7-800 lb. steers, all feeders over 700 lb. saw prices firm higher averaged $191 per cwt.
Large feeders weighing more than 900 lb. saw good demand and prices rallied $3-5 higher with an average price of 163.66 per cwt. in Alberta.
For eight straight weeks auction volumes have trended steady or above to year ago, but this week’s offering was seasonally lower.
More cows to market
Dry weather and increased calf mortality due to this spring’s harsh conditions have seen more dry cows and pairs coming to market.
Slaughter cow prices eased modestly lower with D1,2 cow prices a dollar lower than last week, and D3’s almost $2.50 lower.
Alberta D1,2 cows were $85-102 per cwt. while Ontario bid $71.20-83.15 per cwt.
Dressed cow bids were pressured down to the low $180s this week. Butcher bulls saw continued good demand and prices firmed $1.36 to an average of $113.55.
Western Canadian non-fed slaughter for the week ending June 2 was slightly larger than the previous week to 6,194 head.
Non-fed slaughter is 12 percent higher totaling 178,836 head. However cows and bulls seem to be staying home with exports year to date down more than 30 percent compared to last year.
Supplies should remain manageable, but poor pasture conditions could flush a few more cows to market and pressure prices lower.
Beef trade drops
U.S. cutout values were seasonally lower this week seeing generally light to moderate boxed beef demand on a light to moderate offering. Middle meats showed some promise leading up to barbecue season. Ribs surged over $6 per cwt. higher this week and Choice loin and brisket rallied over $3.00 higher.
Beef trimmings softened with generally light demand reported on a moderate offering. Fifty percent trim traded $10 per cwt. lower and 73 percent ground was $20 lower than last week.
Canadian cutout values for the week ending May 25 firmed modestly with AAA up almost $2 to $283.90 and AA up $1 to $265.71 per cwt.