Canadian fed prices rise
Rising corn prices due to hot, dry Midwest weather and the weakening world economy drove Chicago fed futures lower, which pressured Canadian cash cattle.
The Canfax weekly average fed steer price was $109.83 per hundredweight, down $3.13, and heifers were $109.15, down $3.24.
Almost all dressed trade was $185-$186 per cwt. delivered.
Packers have had a significant supply of captive cattle recently, which has also weakened the cash market.
No significant Saskatchewan cash trade was reported.
There was light U.S. buyer interest, but only a few Canadian cattle traded south.
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Not all cattle sold and some will be added to this week’s show list.
Volume was 16,489 head, down 14 percent from the previous week, and down 29 percent from last year.
The Alberta fed cash-to-futures basis widened to -$9.13.
Weekly fed exports to June 9 were 6,128 head, up 39 percent from the Memorial Day shortened week.
So far this year, exports to the United States are down two percent from last year.
Weekly western Canadian fed slaughter to June 16 at 39,462 head was down one percent from the previous week.
Projected marketings into July are expected to be steady, but beef demand beyond the July long weekend remains uncertain. Prices will face downward pressure.
Cows fall from highs
The dry weather in the U.S. is pushing more cows to slaughter, lowering prices there. Beef trim prices were also lower, and the two events pressured Canadian prices off their recent highs.
Commercial auctions reported that half to two-thirds of the offering were butcher cattle.
Butcher cows fell $3-$3.50 per cwt. from the previous week’s records. D1, D2 ranged $75-$88 to average $81.50 and D3s ranged $65-$79 to average $72.43.
Rail bids fell $6 to $148-$154.
Butcher bulls fell 50 cents but are $12.50 higher than the same time last year.
The northwest U.S. is getting dry, which could weaken export demand.
Non-fed values will likely fall $2-$3 this week.
Canadian feeders rise
Rising corn prices are raising feeding costs and lowering Chicago feeder futures prices.
However, western Canadian feeder prices rose last week, with steers up $1.95 per cwt., while heifers were up 73 cents.
The spread between steers and heifers has widened for four weeks and now stands at $11.92 per cwt.
The few uniform packages of fall-born calves at market are testing the top end of the Canfax price range.
Auction volume was 11,039 head, down 17 percent from the previous week.
Weekly feeder exports to June 9 totalled 3,138, down 14 percent.
Feeder exports to the U.S. have already surpassed last year’s total.
Western Canadian feeder prices will likely fall, if futures continue to fall and barley follows corn higher.
However, despite current feeding losses, demand for quality bunk replacements should remain strong.
U.S. beef edges lower
U.S. cut-out values fell $1-$2 on moderate demand and offering.
Orders for the July 4 Independence Day weekend are mostly filled and follow-up demand is questionable, given America’s economic problems.
Beef prices might fall, but recent strong pork cut-out values will limit the fall.
The U.S. Choice-Select record spread is widening, which analysts attribute to the new Walmart Choice beef program that includes TV ads that say consumers can buy restaurant quality steaks at its meat counters.
Weekly Canadian AAA cutouts to June 15 were $199.04 per cwt., up from $198.08, and AAs were $195.06, up from $193.04.
The Montreal wholesale for delivery this week was anticipated steady at $210-$212 per cwt.
U.S. cattle on feed surprise
Declining, dry pastures in May caused producers to put 15 percent more cattle in U.S. feedlots than last year at the same time.
The U.S. cattle-on-feed report June 22 showed May placements at 2.087 million head, the largest placement total for the month since 2.159 million in 2007.
Traders expected a 13 percent increase.
The number was also increased by more Mexican cattle going to southwestern U.S. feedlots as persistent drought hurt pastures there.
The high placements drove the June 1 total up to 11.082 million, up two percent from last year and the most since 2007.
Traders expected a 0.6 percent increase.
Marketings in May were up only one percent, well below traders’ forecast of almost five percent.
Analysts attributed the low number to week fed cattle prices in May.
