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 market ahead
Fed steers averaged $147.01 per hundredweight last week, down slightly from the previous week, while heifers averaged $148.87 per cwt., up $3.15 per cwt. from last week.
The next 30 days are traditionally a strong period for the fed cattle market. In seven out of the past eight years, second half highs have occurred in December. The fed market has broken out of its sideways trading pattern, advancing $5-$7 over the past couple of weeks. With weighted average steer and heifer prices averaging in the upper $140s per cwt., prices are at the highest point since late May.
Last week, most of the dressed sales were reported at $246 per cwt. delivered. Buyers indicated cattle bought last week were being scheduled for delivery the week of Dec. 9. Lift times seem to be tightening because this was the third week in a row that packers were buying cattle for the first half of December delivery.
U.S. buying interest was noted and almost half of last week’s cash offering traded into the United States. Sales to the U.S. were reported at US$193 per cwt. delivered.
Depending on freight and dressing percentage, U.S. sales were working back to the low $150s per cwt. on a live basis, f.o.b. the feedlot. Cattle being marketed into the U.S. are being picked up within one to two weeks, which is helping to keep weights under control.
Western Canadian fed slaughter for the week ending Nov.16 totalled 46,306 head. For the middle of November, this is the largest volume since 2004.
In Ontario, dressed sales were reported at $236-$240 per cwt. delivered. Packers are comfortably bought out in front as cattle would not be delivered until the week of Dec. 23. Eastern Canadian steer carcass weights historically increase until the end of December.
Based on monthly prices, in 15 of the past 17 years, fed prices have increased from November to December. The average month over month increase stands at 3.5 percent.
In U.S. trade, dressed sales in the north ranged from US$182-$184 per cwt., steady to $2 per cwt. higher than the previous week. Most of the live sales were reported from $115-$116 per cwt. Live sales in the south were steady to $1 per cwt. higher. Beef cow slaughter volumes have been larger over the past few weeks and with more heifers entering the slaughter mix, it suggests expansion of the beef herd has stopped.
Cow prices low
Alberta non-fed prices trended steady to modestly higher last week on a seasonally ample offering. D2 and D3 cows traded steady to firm, with D2s averaging C$79.90 and D3s averaging $69.92 per cwt. D2 prices last week were at the lowest point seen this year and are searching for a bottom.
Feeder cow prices eased $3.33 per cwt. lower and a significant volume is currently being put on feed. Dressed cow bids were reported steady with the previous week from $153-$157 delivered. Butcher bull prices rallied almost $1 per cwt. higher than the previous week, averaging $98.09 per cwt.
Western Canadian non-fed slaughter volumes for the week ending Nov. 16 surged 37 percent larger than the previous week to 11,312 head and year to date were three percent larger, totalling 358,289 head. U.S. trim values eased lower last week but will remain price supportive. Slaughter cow prices may not have bottomed yet, but prices this week were expected to be generally steady with good feeder cow demand being supportive.
Feeder demand softens
Stocker and feeder demand softened last week as feedlots focused on establishing previously placed calves and are hoping muddy pen conditions dry out or freeze up. Calves less than 600 pounds saw prices steady to $1.50 per cwt. lower than the previous week and 600-900 lb. feeders traded barely steady to $5 per cwt. lower. Large feeders over 900 lb. slipped over $1 per cwt. lower.
Feedgrain prices have firmed higher for November-December delivery and negative breakevens continue. Auction volumes of 75,424 head were lower than the previous week but larger than the same week last year. Year to date volumes are four percent lower than last year, totalling 1,449,214 head.
The U.S. Department of Agriculture reports that Canadian feeder exports to the U.S. for the week ending Nov. 9 rebounded 90 percent larger than the previous week to 3,235 head. Year to date feeder exports are two percent larger at 177,861 head.
Feeder prices softened throughout last week and bearish momentum is expected this week. Good quality calves should be mostly steady, but selective buying could widen the trade range and average prices are anticipated lower.
Calf prices typically strengthen through December, and lighter offerings for the remainder of 2019 should be price supportive. In contrast, larger feeders historically see prices soften steadily right through to the end of the first quarter in the new year.
In U.S. beef trade, Choice and Select values were down US$6.20 and $1.98 per cwt., respectively, as the market shifted focus to turkey and ham. Choice averaged $234.86 and Select averaged $213.86 per cwt.
Canadian cut-out values for the week ending Nov. 16 saw AAA and AA up C$3.55 and $9.47 per cwt., respectively. The increase in AA value was driven by the rib primal with prices up 10 percent.
The AAA/Choice spread weakened from -$28 per cwt. to -$32 per cwt. because of a weaker Canadian dollar. The AA/Select spread went from -$18 to -$16 per cwt.