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Canfax report

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 moderate volume trade last week with average prices firming over $3 per hundredweight higher than thin trade seen in the previous week. Dressed sales for varied delivery were reported from $226-$228.50 per cwt. delivered with the bulk at $228 per cwt. A few cattle traded south last week at a premium to local bids at US $180 per cwt. delivered.

For the week ending Nov. 14, western Canadian fed slaughter was down 17 percent from the previous week at 38,582 head and year-to-date was down two percent at 1,819,052 head. Western Canadian steer carcass weights were 31 pounds larger than the same week last year. In contrast, eastern Canadian steer weights were 10 lb. lighter than year ago.

The USDA reports Canadian fed cattle/cow exports for the week ending Nov. 7 were six percent larger than the previous week at 11,349 head and 12 percent below the same week last year.

Early week Ontario fed trade was reported from $228-$232 per cwt. delivered. Bids firmed over the course of the week to $232 per cwt. delivered, but many feedlot managers were not motivated sellers.

The Alberta cash market has been range-bound over the past 20 weeks from $133-$138 per cwt. The fed market historically gains momentum through December, but ample out-front packer inventories have swelled almost to the end of the year.

Good feeding conditions and performance are being reported in yearlings scheduled for the first quarter fed market, and ample market-ready supplies are also anticipated in the new year. Market-ready feedlot supplies are trending cautiously current, but large carcass weights are contributing to increased beef production.

U.S. cut-out values have rallied seasonally higher on improved holiday demand but are not expected to hit overhead resistance over the next couple of weeks.

In the United States, light to moderate trade saw prices generally steady to $2 per cwt. lower than the previous week. The bulk of live trade in most feeding areas was reported from US$109-$110.25 per cwt., steady with the previous week. Dressed trade in the north was steady to $2 per cwt. lower than the previous week’s Nebraska rail average from $170-$172 per cwt. delivered.

U.S. steer carcass weights for the week ending Nov. 7 were reported at 924 lb., two lb. smaller than the previous week and 16 lb. heavier than the same week last year.

Cow prices still low

Since mid-October, cow prices have dropped more than C$10 per cwt., but the market is starting to show signs of stabilization because prices were $1 per cwt. higher through commercial auctions last week. For the month of November, D2 cow prices are on track to average around $68.50 per cwt., the lowest November average since 2012. Last week D2s averaged $69 per cwt. and D3s averaged $58 per cwt.

Even though non-fed supplies have increased, non-fed volumes are much smaller compared to what would normally be on the market at this time of year. With disappointing prices, many cow-calf producers are opting to keep their culls at home in hopes of a price bounce into December or January.

Western Canadian cow slaughter for the week ending Nov. 14 totalled 4,657 head compared to the same week last year when more than 10,000 cows were processed. Over the past four weeks, western Canadian cow slaughter is down 12,300 head compared to last year, while eastern cow slaughter over the past four weeks is 1,700 head larger than last year.

Feeder cow buyers have been active, and U.S. buying interest has also been noted. Slaughter rates will have to improve to prevent a backlog of non-fed cattle into the new year.

Light stockers trend up

Week-over-week auction volumes in British Columbia, Alberta, Saskatchewan and Manitoba rebounded last week, but all provinces are still reporting auction receipts below the same week last year. The bright star of the market last week was calves and lightweight stockers. Lightweight steer calves weighing 300-400 lb. traded $10 per cwt. higher and established new annual highs. Same weight heifer calves were trading within $1 per cwt. of their annual high.

Since late October, 500-600 lb. steer calf prices have rebounded $13 per cwt. and are trading at the highest point since August. There continues to be a minimal price spread between the June and August live cattle contract, which has supported the calf market. Many of the five weight calves bought now will be priced against the August live contract. There is about a 50 cent per cwt. price difference between the two contracts, while last year August live cattle were trading at a $2.25 per cwt. discount to June.

Last week, the forward delivery market was lightly tested, with 900 lb. heifers for march delivery trading in the mid-$160s per cwt. Over the past five years, the average price decline for 900 lb. and heavier heifers from November to March stands at 13 percent. So far this year, fourth quarter Canadian feeder cattle exports to the U.S. are averaging around 2,774 head on a weekly basis compared to 2,151 head last year.

In the outlook, volumes have been light, but a few more preconditioned calves are starting to hit the market, and prices are comparable with freshly weaned calves. As more preconditioned calves come available, look for buyers to start pricing in a premium.

Cut-out value rises

In U.S. beef trade, cut-out values rallied aggressively higher again last week. Choice averaged US$237.70, up $11.20 per cwt., and Select averaged $213.89, up $5.65 per cwt. Last week’s total U.S. cattle slaughter was estimated slightly larger than the previous week at 665,000 head. U.S. cut-out values are closing in on a fourth quarter high.

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