This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattle Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.
Softer fed market
Western Canadian fed cattle softened $1-$2 per hundredweight from the previous week, providing a slightly stronger basis. Alberta fed steers averaged just shy of $255 per cwt. live ($424.80 per cwt. dressed). Dressed heifer sales were in line with their steer counterparts, but live trade at $259.50 per cwt. pushed the weekly weighted heifer price to a premium over steers.
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Over the last 12 weeks, Alberta fed steer prices have averaged eight per cent higher than last year. For the month of July, fed steers were seven per cent higher than last year, while heifers were at an eight per cent premium.
In Ontario, fed cattle saw a $2 per cwt. (live) rise in prices last week. Ontario fed steers averaged $253 per cwt., with heifers at $251 per cwt. Last week’s performance in Ontario narrowed the regional gap to $2 per cwt. on steers and $5 per cwt. on heifers. This is a marked improvement from mid-July, when Ontario fed cattle were at an $8 per cwt. discount to their Alberta counterparts.
There are rumblings the United States may be headed toward a soft landing or even a recession, impacting consumer demand. More volatility in the futures is expected in the lead up to the U.S. election.
In the U.S., trade was moderately active, with the south at US$186-$187 per cwt., steady to $1 per cwt. lower than the previous week.
Trade in Nebraska was at $193 per cwt. live and $305 per cwt. dressed. The negative outlook on the futures market may have encouraged selling. Over the last week, August live cattle futures have declined 200 basis points, closing Aug. 8 at $182.05 per cwt.
Cow prices rally
Butcher cow prices usually see a bit of a rally in early August before drifting lower toward the end of the month as more numbers come forward. Alberta D2 cows traded $3 per cwt. higher through commercial auction facilities, establishing new all-time highs at $196.14 per cwt. D3s averaged $181 per cwt.
Last year at this time, auction facilities were already splitting cow-calf pairs but not this year. Many cow-calf pairs are going back to the ranch, keeping cows out of the slaughter mix.
Over the past five weeks (July 6 to Aug. 3), western Canadian cow slaughter totalled 23,500 head, 24 per cent lower than last year. This is the fourth smallest July cow slaughter volume over the past 12 years. Only 2015, 2016 and 2020 were smaller.
Larger non-fed numbers are on the horizon, but supplies are expected to remain manageable throughout the fall because many producers have culled harder than normal over the past few years.
Light feeder volume
Last week, more than 70 per cent of cattle on offer traded via electronics. Live cattle contracts have been under pressure, taking some shine off the feeder cattle market.
With light volumes, buyers are having a tough time assembling loads, and this kept some buyers off the market. One thing that has stood out in recent weeks is the larger amount of 1,025 to 1,100 pound feeders on offer. Some of these heavier feeders are coming out of background lots while some are coming off grass.
Canfax does not report feeder prices for cattle heavier than 1,000 lb., but from an observational standpoint, 1,025 to 1,100 lb. grass steers are trading from $310-$320 per cwt.
Last week there was a good offering of forward delivery yearlings and calves. From their highs a few weeks ago, forward delivery yearling prices have declined roughly $5 per cwt. Yearlings for October delivery are trading at a slight premium compared to August-September delivery.
Last week, Alberta and Saskatchewan 500-599 lb. steers for October-November-December delivery traded from $444-$516 per cwt. with a weighted average price of $485.06 per cwt. based at 530 lb.
Over the past four weeks (July 6-27), Canadian feeder cattle exports to the U.S. are down 4,750 head compared to last year. The cow-calf pair market was lightly tested last week with sales ranging from $3,700-$4,550 per pair, averaging $4,025 per pair.
From a value standpoint, one could argue cow-calf pairs are a good buy considering strong salvage value on the cow and strong forward delivery calf prices.
Cutouts steady
In U.S. beef trade, cutouts held up well in the face of market volatility from the live cattle futures as well the larger macroeconomic climate. Choice cutouts closed the week barely steady at US$312.12 per cwt., with Select cutouts fully steady at $298.03 per cwt.
