Fed cattle lower
Profit taking and unease about the economy and beef demand caused investors to sell cattle futures.
Packer captive inventories are increasing.
Despite growing market-ready supplies in the northern United States, the weak Canadian dollar and a weak Alberta-Nebraska cash-to-cash basis kept U.S. packers interested in Canadian cattle last week.
The Canfax average for fed steers was $112.96 per hundredweight, down $1.75, and heifers were $112.39, down $1.36.
Dressed sales were generally $2-$3 lower with most trade at $190-$191 per cwt. delivered.
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The weaker prices caused feedlots to reduce marketings. Sales totalled 19,251, down three percent.
The cash-to-futures basis weakened to close at -$6.83.
Weekly fed exports to June 2 totalled 4,412, down 38 percent from the previous week.Packer margins have improved , which could prompt increased slaughter.
Cut-out values are strong but are likely nearing a peak. Expected larger slaughter volumes and increased beef production will likely pressure prices lower.
Cows mixed
D1, 2 cow prices fell 75 cents per cwt. while leaner D3 prices rose 25 cents. D1, 2 cows ranged $79-$91 to average $85.14. D3 cows ranged $70-$82 to average $75.75.
Dressed cow prices fell $2. The rail grade range was $154-$160.
Butcher bull prices were steady to average $99.17 per cwt.
Weekly western Canadian non-fed slaughter to June 9 fell six percent to 4,403. Weekly cow exports to June 2 rose 46 percent with the closure of the Levinoff-Colbex cull plant near Drummondville, Que.
Total non-fed exports were up 38 percent .
Feeder cattle edge lower
Feeder prices fell about 50 cents per cwt. and price ranges widened, depending on quality and lot size.
Auction volume was light to moderate.
More than half the cattle sold were non-fed slaughter cows and bulls.
Stocker steers lighter than 600 pounds traded moderately lower.
Steers 600-700 lb. fell more than $3, as did 400-600 lb. heifers. The average was weakened because of fewer quality calves in the mix.
Feeders heavier than 700 lb. were mostly steady to $2.75 higher on good demand. Auction volume was down 12 percent.
Weekly feeder exports to June 2 rose 10 percent to 3,653 head. Exports are up 88 percent this year.
Auction volume normally drops this time of year and remains tight until August.
Cattle on feed drops
The Alberta-Saskatchewan June 1 cattle-on-feed report showed 844,873 head on feed, down nine percent from last year.
Placements in May were 102,831, steady with last year.
Marketings were 151,316, up four percent.
Feedlots have a large number of feeders heavier than 800 lb., mostly pulled in from background lots.
Competition for the dwindling supply is expected to intensify now that most captive feeders are on full feed.Prices are expected to be steady on quality feeders.
Spread widens
U.S. beef cutouts were mixed with Select trending lower to widen the Choice-Select spread.
Loin prices are strong and demand for quality middle cuts is much better than a year ago, pushing the Choice-Select spread to the widest level in six years.
The Montreal wholesale prices for delivery this week was steady, ranging from $210-$212.
Weekly Canadian cut-out values to June 8 were mixed with the spread here also widening.
AAA value rose $4.58 and AA fell $1.29.
Weekly Canadian fed slaughter to June 9 rose seven percent at 49,913 head.
Slaughter is down one percent this year.
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.
