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 steady
Alberta direct cattle sales saw the largest weekly trade volume so far this year, and prices were steady to slightly lower than the previous week. The market tone softened on Aug. 27, and weighted average prices closed last week around $1 per hundredweight lower.
A full dressed range was reported from $226-$232 per cwt. delivered with the bulk of cattle priced at $230 per cwt. delivered. Live prices were comparable with rail trade from $136.75-$138 per cwt. Live weights remain manageable, and cattle priced last week were comfortably scheduled for two to five week delivery.
The Alberta cash-to-futures basis strengthened last week from -3.63 to 0.26. Western Canadian fed slaughter for the week ending Aug. 22 was three percent smaller than the previous week at 47,667 head and has been over 40,000 head for the past 13 weeks.
This year, weekly western fed slaughter has been larger than 45,000 head in 10 out of 34 weeks. Canadian steer carcass weights for the week ending Aug. 22 were steady with the previous week and seven pounds lower than a year ago at 908 lb.
For the week ending Aug. 15, the U.S. Department of Agriculture reported that Canadian fed cattle-cow exports were slightly lower than the previous week and the same week last year. The Ontario fed market started the week steady but lost momentum. Dressed sales on Aug. 27 were reported steady to $2 per cwt. lower from $243-$245 per cwt. delivered.
A large cash offering is anticipated this week, and leverage will continue to shift toward the buyer as captive supplies build larger. With Labour Day wrapped up, beef demand is likely to soften.
In the U.S., cattle futures realigned lower last week and pressured the cash market lower. Live trade in the south trickled in last week with prices steady to $1 per cwt. lower at US$104-$106 per cwt. In the north, scattered light live trade surfaced at parity with the south and around $1 per cwt. lower than the previous week.
Light dressed sales Aug. 27 were more than $2 per cwt. lower than the previous week’s Nebraska rail average at $167 per cwt. delivered.
U.S. steer carcass weights for the week ending Aug. 15 were three lb. heavier than the previous week at 909 lb. and sharply 28 lb. larger than year ago. Last week’s total U.S. slaughter was estimated at 654,000 head. Large feeder placements topped up feedlot pens in July, and an ample offering of stockers and feeders saw prices trend steady to $5 per cwt. lower.
Cow prices lower
There have been reports of open cows that had been grazing or drylotted over the summer coming to market. For the month of August, it is more common to see price highs occur during the first half of the month versus the second half. Since the start of August, D2 cow prices have dropped by C$2.25 per cwt., last week averaging $86.64 per cwt. D3s averaged $76.36. It is possible that third quarter highs are behind us.
Over the past few weeks Alberta D2 cow prices have been trading at a $3 per cwt. premium against the U.S. utility cow market. Since the beginning of June western Canadian cow slaughter is down 27 percent compared to last year.
Western Canadian packers have been putting a lot of hours toward the A grade slaughter. Non-fed supplies are expected to seasonally increase into the fall but should remain manageable. If cow slaughter volumes do not pick up from current levels into September, there is a risk that non-fed supplies could start to back up and pressure prices.
Ninety percent trim prices in the United States remain strong, trading in the $225-$228 per cwt. area and slightly higher than last year.
Yearling demand rises
A few freshly weaned calves were on offer last week, and prices were lower. Buying interest on the few calves that are around is likely coming from the background operators. For the time being, feedlots are in yearling buying mode. Demand remains strong with prices at or close to annual highs. Some yearlings that would traditionally be retained and taken to finish are instead being sold on the open cash market.
The Alberta 850 lb. feeder cash-to-futures basis strengthened last week, going from +$1.05 per cwt. to +$4.42 per cwt. September is traditionally the strongest basis month of the entire year.
Last week, the forward calf market was lightly tested. Trading via electronics, British Columbia, Alberta and Saskatchewan steer calves weighing from 500-600 lb. for October-November delivery saw prices range from $204-$227 per cwt. with a weighted average price of $218.82 per cwt. based at 549 lb. Forward delivery calf prices are right in line with last year’s cash prices for October-November.
Canadian feeder cattle exports for the week ending Aug. 15 totalled 1,228 head, 35 percent smaller than last year and 36 percent smaller than the five-year average. For the middle of August, this is the lowest weekly export volume since 2012. For the month of August, electronic volumes were down four percent compared to last year while volumes through commercial auction facilities were up 19 percent.
Harvest is underway in southern Alberta and yields are above average in many areas. Cash barley prices have seen a significant drop because prices are now trading at the lowest levels reported this year. There have been reports of barley from southern Alberta shipped into south-central Alberta.
Barley sales for January to March 2021 delivery into southern Alberta are trading at roughly a $20 per tonne, or a 45 cents per bushel premium compared to the spot market.
Cutouts rally higher
In U.S. beef trade, good Labour Day demand was seen for middle meats last week, and U.S. cut-out values rallied higher. Choice averaged US$231.54, which was more than $6 per cwt. higher than the previous week, and Select averaged $214.26, up $8 per cwt. Strong beef features will continue to enhance retail buying, but food service seating capacity will soon be reduced as patios shut down for winter and social distancing continues.