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.
Packers keep leverage
The Canadian dollar is moving lower and live cattle futures contracts are rallying, so the stage was set for higher prices last week but didn’t happen. Packers continue to have leverage over cattle feeders, reflected in weaker basis levels and a sideways grinding market where prices continue to hover near the second half of the year lows.
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Competition in the cash market was limited. In some instances, packers did not bid. In addition, U.S. packer interest on the western Canadian cash market was fairly quiet. Dressed sales were reported from $405-$408 per hundredweight delivered.
Last week’s Alberta fed cash-to-futures basis was reported at minus $17.29 per cwt., the weakest since March. Western Canadian steer carcass weights have slipped below last year.
The only class of cattle with larger slaughter volumes than last year is western Canadian heifers, with year-to-date volumes up one per cent at slightly more than 666,000 head. This is the second largest year-to-date heifer slaughter volume. Only 2022 was larger.
In recent weeks, smaller heifer slaughter volumes have been noted, with volumes below last year and the five-year average.
In Ontario, dressed sales were at $406 per cwt., delivered, fully steady with the previous week.
From a supply perspective, the market is working through seasonally larger supplies.
In the United States, live sales in the northern feeding states ranged from US$187-$188 per cwt., while southern regions traded from $186-$187 per cwt., $1 per cwt. stronger than the previous week. Dressed sales in Iowa and Nebraska were at mostly $296 per cwt., fully steady.
For the week ending Sept. 28, U.S. beef cow slaughter totalled slightly more than 54,000 head, 24 per cent below last year. For the end of September, this is the smallest slaughter since 2018.
U.S. beef exports for August were nine per cent lower than last year.
Cows under pressure
The Canadian non-fed market continued to be under seasonal pressure last week. Alberta D2 cows softened around $2.60 per cwt. from last week to slightly less than $177 per cwt., while Alberta D3 cows moved $3.25 per cwt. lower to $164.19 per cwt.
Feeder cows (minus $2.20 per cwt.) and butcher bulls (minus $5.35 per cwt.) also followed, ending the week at $190.07 per cwt. and $195.90 per cwt., respectively. Rail grade cows managed to hold their own, closing steady with last week at $350-$360 per cwt.
The story was much the same in Ontario, with D2 cows closing the week almost $3 per cwt. lower to $158.55 per cwt., and D3 cows easing 50 cents per cwt. lower to $130.93 per cwt.
Year to date, Canadian cow slaughter volumes total 305,400 head, down 17 per cent from last year and down 12 per cent from the five-year average, while bull slaughter volumes totalled 12,600 head, down 13 per cent from last year but up three per cent from the five-year average.
Year to date, Canadian cow carcass weights average 776 lb., 39 lb. heavier than last year and 48 lb. heavier than the five-year average. Bull carcass weights, at 987 lb., are 36 lb. heavier than last year and 26 lb. heavier than the five-year average.
Feeders selling well
Alberta feeder cattle saw a strong week with more calves going through auction marts. Calves from 300-400 lb. traded $4.73-$12.96 per cwt. higher than the previous week. Steer calves reached a new annual high of $495.14 per cwt. but remain $9/cwt below year-ago, while heifers are up $32/cwt compared to a year ago.
Calves in the 400-500 lb. range rallied $12.33-$13.59 per cwt., with both steers and heifers seeing gains of $13.50 per cwt. and $18.45 per cwt., respectively from a year ago. Steers and heifers from 500-700 lb. traded $2.45-$8.20 per cwt. stronger than the previous week.
Heavier cattle traded mostly steady. All classes of feeder cattle are trading higher than last year, except for 300-400 lb. steer calves. Despite four consecutive weeks of stronger prices, they have yet to reach $500 per cwt. this year.
For the week ending Sept. 28, feeder cattle exports to the U.S. totalled 3,092 head, down 16 per cent from last year. This is the 15th consecutive week of lower exports compared to a year ago. Year to date, feeder exports are now 10 per cent lower than last year at 114,062 head.
Cutouts rise
In U.S. beef trade, Choice cutouts climbed 3.5 per cent from the previous week to close just shy of US$310 per cwt. Select cutouts also trekked higher, ending the week 2.5 per cent higher at $291 per cwt.
