Fed cattle still high
Cash trade in the United States developed late last week at US$168 per hundredweight, down $2 from the previous week’s record high.
A handful of U.S. dressed sales were reported at $265, steady with the previous week.
Contracting opportunities and formula pricing are discouraging North American cash trade.
Alberta direct cattle sales were too light to establish a reliable price trend. Cattle quality and show list volumes were inconsistent, and reported prices varied widely.
A seasonally weak fed basis encouraged U.S. buyer interest, but bids were not competitive.
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Weekly western Canadian slaughter Oct. 25 plunged 14 percent to 30,833 head because of one Alberta plant being down for a day.
Weekly exports to Oct. 18 were up 63 percent to 9,677 head.
Hedging and contracting opportunities will continue to limit cash trade.
However, formula pricing and contract bids will support the cash market, which usually strengthens into the fourth quarter.
Prices should be well supported if American packers provide better competition.
Packers have the leverage needed to push cut-out prices higher, but retailers are resisting the move and consumers are noting cheaper competing meats.
Cow prices up
D1, D2 cows ranged C$119-$132 to average $126.38 per cwt., up 88 cents. D3 cows were $100-$120 to average $110.67.
Rail grade cows ranged $245-$250.
Bulls were $138.50, up 38 cents.
Western Canadian cow slaughter has ranged from 5,800- 6,200 head in recent weeks, down from the same period last year when volumes were 6,500-9,200 head.
Canadian non-fed exports to Oct. 18 totalled 6,720 head.
Cow slaughter volumes have increased from October to November in recent years.
Non-fed volumes are anticipated to pick up heading into November.
Feeder price down
The fall calf run is in full swing, and the volume is pressuring feeder and calf markets.
The feeder steer average was down $1.13, and heifers fell $1.05.
It was the first time since November 2012 that the Alberta weekly auction exceeded 100,000 head.
Logistics continue to be an issue. Buyers are pricing in the additional risk to the market if trucks cannot be sourced for immediate pickup.
Steer marketings are outpacing heifer marketings.
Many commercial auctions in Alberta and Saskatchewan reported that 60-70 percent of their total offerings were steers.
The wide steer-heifer price spread, particularly on calves, helps explain the small heifer offering.
Stronger corn prices are lifting barley values.
Wheat will start entering feedlot rations if barley continues to rise.
Weekly feeder exports to Oct. 18 totalled 9,779 head, up 80 percent over last year.
Volume should be high again this week but might be peaking.
The weaker Canadian dollar supports feeder prices, but prices are anticipated to be steady to weaker this week.
Bred cows ranged $1,700-$2,700.
Beef rises
U.S. Choice cutouts traded $3.92 per cwt. higher at $253.35, and Select rose $5.87 to $239.41.
Packers increased asking prices after paying more for cattle, but buyers remain cautious on procurement.
Canadian cut-out values for the week ending Oct. 10 saw record prices with AAA at $272.93 per cwt. and AA at $262.33.
Prices were up $8-$11 from the previous week, the largest weekly increase since January.
Chucks and rounds moved sharply higher with the support of strong trim prices.
The AAA-Choice spread narrowed to -$1.10 per cwt., while AA traded at a $1.88 per cwt. premium over Select.
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.
