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 prices steady
Alberta direct cattle sales saw light to moderate volume trade last week with the market tone being steady to softer. Weighted average steer prices closed steady with the previous week, and heifer prices were $2 per hundredweight lower. One major packer has recently secured a comfortable cushion of formula inventory, and last week’s cash market lacked competition. Cattle marketed last week were tentatively being scheduled for four- to six-week delivery.
For the week ending Sept. 19, western Canadian fed slaughter surged 13 percent larger than the previous week to 48,920 head, the fourth largest seen this year. Western Canadian steer carcass weights were reported to be 23 pounds heavier than the previous week and 24 lb. larger than the same week last year. This is the largest year-over-year increase in carcass weights since June.
The cash-to-cash basis continues to weaken and was estimated at -$6.42 per cwt. last week, the weakest level since June. The U.S. Department of Agriculture reports that Canadian fed cattle/cow exports for the four-day week ending Sept. 12 were 7,131 head, down 14 percent from the previous week and 27 percent lower than the same week last year.
Ontario packer bids of $230 per cwt. delivered did not encourage cash trade last week, and a market trend was not fully established.
With less beef being harvested in Australia and additional positive tests for African swine fever in Germany, global beef demand should be price supportive. Boxed beef values had seasonally eased lower, and beef at retail is competitively priced.
Good packer margins should encourage a large kill again this week, and one packer will be adding a Saturday shift. Static demand is anticipated this week for fed cattle, and prices are expected to trend sideways until holiday beef buying improves in October.
In the United States, there was a stronger tone in the fed market for the second week in a row. Prices were generally US$1.50-$2 per cwt. stronger than the previous week. There was little regional price difference last week because prices were generally $105 per cwt. in both south and north.
Total slaughter was estimated to be 1,000 head larger than last year. If realized, this would only be the fourth week since the start of April that slaughter exceeded a year ago.
The U.S. feeder market was generally steady last week, while calves and cows saw modest seasonal pressure.
Cows staying home
Non-fed auction volumes continue to be light. Relatively good grass and harvest conditions are keeping cows at home. Cow prices did see some seasonal pressure last week and are about C$3 per cwt. below a year ago. D2 cows averaged $82.88 and D3s averaged $72.80.
Non-fed volumes will likely continue to be moderate in the short term, which should slow downside pressure, but ample supplies of fed cattle will limit demand as well.
Western Canadian total slaughter last week was almost 6,000 head higher than a year ago, but non-fed slaughter was actually about 1,800 head lower than last year. Cow prices are expected to be steady to slightly lower this week, with more market pressure seen in later October and into November.
Cow prices have averaged lower in October compared to September in 11 of the past 15 years.
It was another relatively strong week for the Canadian feeder and calf markets. Feeders continued to see seasonal strength with feeders heavier than 800 pounds generally trading $1-$3 per cwt. higher than the previous week. Yearling supplies are starting to tighten and will be very limited by the start of October.
Calf volumes through the auction marts were still small last week and will likely remain light until the calf run starts to pick up in mid-October. Calves from 500-700 lb. saw light seasonal pressure last week on varied quality. Both calf and feeder prices are near year-ago levels.
Calf volumes continued to be dominated by forward calf sales for October and November delivery. These load lots of calves for forward delivery are trading at the top end of the price range for calves selling on the spot market through auction. Ontario buyer interest also remains strong with Ontario and Manitoba prices being higher than Alberta.
Ongoing feedlot losses and rising feed costs do not appear to be having much impact on the calf and feeder market. Local feedlots continue to speculate on these calves and feeders by buying them $100 per head or more offside.
The weaker tone for the Canadian dollar has added some support. Given the light volumes that are expected, downside pressure is generally limited over the next couple weeks. Further out, calf prices are still expected to have some pressure as the fall run drags on.
Cut-out value rises
In U.S. beef trade, cut-out values firmed contra-seasonally higher last week on potential second wave COVID buying and scattered early holiday buying interest. Choice averaged US$217.48 and Select averaged $207.74 per cwt.
Lacklustre beef demand is anticipated until holiday buying gets underway. Cut-out values seasonally trend steady to softer through September, but COVID and tighter global beef and pork supplies have been modestly supportive.