Steer price rises
Alberta direct cattle sales saw active trade last week. The weighted average Alberta fed steer price was $3.29 per hundredweight higher than the previous week with live sales reported from $150.25-$152 per cwt. to average $150.30. Heifer prices firmed modestly with trade from $148.25-$151.25 per cwt., averaging $149.52.
Dressed trade developed at $250-$251 per cwt. delivered, which was $4-$5 per cwt. higher than the previous week’s rail average. A seasonally weak cash to cash basis at around -$8 per cwt. encouraged American buyers to offer US$194 per cwt. delivered dressed, which worked back to about a $1 per cwt. premium to local bids.
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U.S. buyers have procured Alberta fed cattle over the past five weeks to enhance market competition and contributed to tightening market ready supplies.
Western Canadian fed slaughter for the week ending Nov. 23 eased nine percent lower than the previous week to 42,323 head. Year to date western slaughter was seven percent larger, totalling 1,893,604 head.
Western Canadian steer carcass weights were 907 pounds lower than a year ago. Weekly Canadian steer weights have only been below year ago four times this year.
Limited Ontario fed trade was reported fully steady last week at $236 per cwt. delivered, and a handful of cattle for delivery in late December traded at $240 per cwt. delivered.
Feedlot supplies should continue to tighten through December, and leverage is expected to shift toward the seller. Over the past two weeks the cash to cash basis has weakened below the weekly five-year historic average to encourage U.S. buying interest.
Basis levels typically strengthen through December, which could encourage more fed cattle to stay in Canada. However, northern U.S. packers would like to maintain large harvests through December, which should maintain competition in the Alberta fed market.
In the U.S., there was light trade before Thanksgiving Thursday with live sales trending US$2-$3 per cwt. higher than the previous week at $117-$119 per cwt. in the south and $118-$120 in the north. Scattered dressed trade in the north was reported from $186-$188 per cwt. delivered, which was $2-$3 per cwt. higher than the previous week.
Winter storms and excessive precipitation wreaked havoc from the east to west coast last week to delay harvest in the northern Plains. Heavy snowfall complicated daily operations and deliveries across the cattle complex in much of the U.S.
Thanksgiving affects beef trade
In U.S. beef trade, cutouts saw softer prices in the holiday-shortened week. Choice and Select were down US$2.62 per cwt. and $3.22 per cwt., respectively. Averages were $232.24 and $210.64. Tighter supplies following the reduced holiday production week should support prices.
Canadian cut-out values for the week ending Nov. 23 saw AAA and AA up C$5.21 and $3.52 per cwt., respectively. AAA averaged $293.57 and AA was $273.41 per cwt. The AAA-Choice spread narrowed from -$31 to -$21 per cwt. The AA-Select spread narrowed from -$16 per cwt. to -$11.
The AAA cutout is $23 per cwt. higher than last year, while AA is $16 per cwt. higher.
Butcher cows stay low
Butcher cow prices continue to hover at or near annual lows. D2 cows averaged $79.75 per cwt. last week, while D3s averaged $70.07. Slaughter bulls were up slightly to average $98.45.
The cull cow market has been disappointing, given Canadian 85 percent trim prices are at the highest point since September 2015. With the strength of North American trim prices, feeder cow buyers continue to be very active on the non-fed market. With ample non-fed supplies available, buyers clearly have the upper hand. If one is considering selling cull cows and the feed situation allows, consider holding them until the second half of December or possibly carry them into early January.
Western Canadian cow slaughter for the week ending Nov. 23 totalled 10,562 head, eight percent smaller than last year. The price spread between Alberta D2 and U.S. cows has narrowed. Over the past three weeks, Alberta D2 cow prices have moved from a $10 per cwt. to a $2 per cwt. premium against the U.S. utility market.
Lightweights see interest
The bright spot on the calf market continues to be the lightweight calves with good interest noted from backgrounders and grass buyers. Alberta steer calves weighing 400-500 lb. are trading within $6 per cwt. of their annual highs, while 600-700 lb. calves established new annual lows last week.
The last time 650 lb. steers averaged below $200 per cwt. was in December 2018. The price spread between 450-650 lb. steers is $46.50 per cwt., the widest spread since March 2016.
From their mid-October high, Alberta 850 lb. steer prices have dropped $10 per cwt. Alberta and U.S. feeder prices have been moving in opposite directions recently as prices in the U.S. hit their highest point this year. Alberta 750 and 850 lb. feeder steer prices are now trading par to a slight discount compared to the U.S. market.
November was another busy month for auction traffic. British Columbia, Alberta, Saskatchewan and Manitoba volumes were up 11, 12, 17 and 23 percent, respectively, compared to last year. This suggests there could be another big placement volume when the next Alberta-Saskatchewan cattle on feed report is released. Some producers indicate feedlot space is an issue.
As for bred cows, many sales have seen lukewarm buying interest at best. Older bred cows and second cut bred heifers are trading at slaughter/feeder prices. On the flipside, demand for young dispersal cows and reputation bred heifers remain strong with top end sales at $2,400-$2,600 per head.
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.
