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 active trade last week, with average prices continuing steady with the previous week. Most sales were reported dressed in a tight $301-$303 per hundredweight delivered trade range.
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The lacklustre formula grid base flushed additional cattle onto the cash market again last week. Year to date, weekly sale volumes were 10 percent lower than the same week last year. Western Canadian fed slaughter for the week ending Sept. 3 eased six percent lower than the previous week to 43,077 head. Year to date, western fed slaughter was up one percent, totalling 1,514,393 head.
Canadian fed cattle-cow exports to the United States for the week ending Aug. 27 were six percent larger than the previous week at 7,407 head and were up 24 percent compared with the same week last year.
Light Ontario trade continued fully steady at $306 per cwt. delivered. The Ontario cash market has been range bound for the past six weeks. With improved feeding margins, feedlot managers are now able to add value by extending days on feed as opposed to pulling soft cattle forward to negate losses, which should improve leverage. The Alberta-Ontario cash-to-cash fed basis continued to tighten and was the narrowest seen this year at -$2.48.
Average Alberta steer prices firmed higher for six weeks before stalling last week. Softer post-Labour Day beef demand and lofty retail prices are expected to limit cash market upside, but tighter market-ready supplies should maintain steady pricing.
In the U.S, light Texas trade continued steady with the previous week at US$141 per cwt. Scattered northern trade was $1-$2 per cwt. lower than the previous week at $142-$143 live, and dressed trade developed at $226-$227 per cwt. delivered.
Nebraska rail prices were expected to average $1-$2 per cwt. lower than the previous week at around $226.75 per cwt. delivered.
Last week’s U.S. slaughter was estimated five percent smaller than the previous week at 604,000 head and four percent larger than the same week last year.
Cow price declines
In recent weeks, non-fed prices have dropped $6-$9 per cwt. Butcher cow prices have declined from August to September in 14 of the past 15 years. Over the past 14 years, the average month-over-month price decline stands at six percent. Even though it is only early September, butcher cow prices have already dropped six percent.
Last week D2s averaged $106.30 and D3s averaged $93.88 per cwt.
Competition on the non-fed market was disappointing, with only one major packer buying cows. Alberta cow prices are trading at roughly an $8 per cwt. discount against the U.S. utility cow market. In the near term, this could mean more Canadian cows could be exported south for slaughter.
Over the previous four weeks, western Canadian cow slaughter has averaged 5,435 head per week, 17 percent lower than last year and five percent lower than the five-year average. For the week ending Sept. 3, Canadian cow carcass weights averaged 735 pounds, 33 lb. larger than last year. For the beginning of September this is the second largest carcass weight on record. Cow carcass weights usually decline throughout the fall and bottom in November.
Feeder prices ride high
Despite higher feedgrain prices, calf and feeder prices continue to trade at or near annual high levels. Ontario calf and feeder prices saw a sizable price increase last week, but Alberta continues to trade at a sizable premium over Ontario.
On average, Alberta calves and lightweight stockers weighing less than 700 lb. are trading at a $9.50 per cwt. premium against the Ontario market, whereas Alberta feeders weighing more than 700 lb. are at a $5 per cwt. premium.
Given the strong Alberta market, grass yearlings from Saskatchewan and Manitoba are coming west into Alberta feedlots rather than going into Ontario. Last week British Columbia, Alberta and Saskatchewan steers weighing 500-600 lb. for October delivery traded from $263-$302 per cwt. with a weighted average price of $276.73 per cwt. based at 560 lb. Weighted average prices are steady to a little stronger compared to two weeks ago.
American cutouts steady
U.S. cutouts maintained sideways movement for another week, with both Choice and Select cutouts steady. Choice ended the week at US$258.01 per cwt. and Select cutouts were $236.04.
