The weaker Canadian dollar and stronger beef prices in the United States lifted fed cattle prices.
The Canfax weighted average steer price was $89.14 per hundredweight, up $1.56, and heifers were $88.89, up $1.48 in the week ending Aug. 13.
Domestic packers bought most cattle, but some U.S. buying providing price support. Tighter cattle supplies in the U.S. will likely keep them buying for the next few weeks.
Cattle futures rallied a bit to keep up with the stronger U.S. cash live trade, which was up $1-$2.With better prices, volume rose almost 35 percent from the previous week.
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The show list included 63 percent captive supply cattle, down from the recent level of about 70 percent.
Canadian steer carcasses rose three pounds, while Alberta steer carcasses climbed 11 lb. over the previous week. Canadian steers are 16 lb. lighter than last year at this time.
The cash to futures basis widened by $2.33 to -$9.28, compared to the four-year average of -$11.12.
Surprisingly strong U.S. beef demand is supporting cattle prices. Low placements into feedlots in June and July could support prices later this year.
COW PRICES SLIP
D1, D2 cows averaged $60.50 per cwt., down 38 cents. Rail grade cows were $112-$116. D3 cows climbed $1 to $56.25.
Since 2006, cow prices have started falling in the second half of August as cow-calf pairs come off grass and are split. However, cow slaughter dropped 10 percent the first week of August, which may support the market.
Bull prices slipped to $72.43.
YEARLINGS HIT MARKET
Auction volume rose to 30,634 head thanks to more yearlings going to market, well up from the previous week’s abnormally small number but still nine percent below year ago levels.
Prices were mostly steady except for 800 to 900 lb. steers, which rose $3 with larger supplies of better quality cattle now available, 500 to 800 lb. steers, which fell by $1-$2, 600 to 700 lb. heifers, which rose $1-$3, and lighter weights, which were mixed.
The cash to futures basis tightened 44 cents to -$12.34.
Prices should rise as quality and volume pick up.
In the last five years, Alberta 800 to 900 lb. steer prices have averaged 123 percent of the fed cattle price in August and 121 percent in September. Using the current fed cash price, this would put 850 lb. yearlings at $109 per cwt. in August, so there is room for the market to rise.
However, feedlots may be cautious about increasing bids with potentially higher feed costs this fall.
Using current cost of gain, yearling prices are pushing break-evens based off the Chicago live cattle futures and current exchange rate.
Futures show the loonie at 95 cents US for March, but bank projections put it at par potentially by then.
U.S. BEEF RISES
U.S. Choice cutout jumped $3.59 to $154.28 US and Select rose $3.04 to $147.02. Weekly Canadian slaughter was down eight percent to Aug 6 at 57,028 head, steady with 2009 levels.
Canadian cutouts fell $1 Cdn to Aug. 6, with the AAA cutout at $144.72 and the AA cutout at $145.77.
CANADIAN CATTLE ON FEED
The number of cattle in feedlots in Saskatchewan and Alberta on Aug. 1 was 639,857, down one percent from last year. There were 62,635 head placed in July, down 23 percent from last year. Marketings in July were 198,704, up one percent.
Placements from May to July are down 20 percent from last 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.
