Canfax report

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.

Steer prices down

Closing last week at $133.20 per hundredweight, weighted average steer prices were $16 per cwt. lower than the five-year average and $3.50 per cwt. below the 10-year average. For the end of October, these were the lowest fed prices since 2013.

The story remains much different in Ontario, where prices have been trading at a premium to the western Canadian market for the better part of the summer and fall. Last week, the Ontario weighted average steer price was reported at $135.60 per cwt., the highest price for the end of October since 2015. Sale volumes were light as competition on the western Canadian cash market was limited and U.S. buying interest was also non-existent.

Dressed sales were reported from $218-$227 per cwt. delivered. Cattle that were bought last week were being scheduled for three to six week delivery, depending on who bought them. Alberta cash-to-futures basis levels weakened from -$1.39 to -$7.95 per cwt. last this week.

Instead of selling cattle on the cash market, some producers committed their cattle to the packer, pricing them off the Canfax average for the week that the cattle would be delivered.

Western Canadian fed slaughter for the week ending Oct. 24 totalled 47,579 head. For the second half of October, this was the largest slaughter since 2004. Over the past three weeks, 7,500 more fed cattle have been slaughtered compared to last year.

Western Canadian steer carcass weights continue to break records, averaging 963 pounds. Despite carcass weights above last year, fewer cattle are in the yield grade 4 and 5 categories versus last year. Yield grade 4 and 5 cattle accounted for 15.9 percent of total yield grades compared to 17.5 percent last year.

Over the past three weeks, more than 12,000 head of cattle have been put on the set-aside program. These cattle are scheduled to be released in December. Last week there were reports that one packer was limiting the amount of grid cattle it was accepting.

In the U.S., mid-week sales in the northern U.S. were reported at US$103 per cwt., but by Friday packers were buying cattle at $106 per cwt., steady to $2 lower than the previous week. Dressed sales were reported at mostly $162 per cwt., steady to $4 per cwt. lower. Calf prices were trading roughly $8 per cwt. lower than last year and were at the lowest point since January 2017.

Cow prices lower

Non-fed prices trended lower last week on seasonally larger offerings but slaughter cow prices did trade at a premium to Ontario. Alberta D2 and D3 slaughter cow prices slipped C$4.50 per cwt. lower than the previous week. D2s averaged $72.33 and D3s averaged $61.58. Dressed cow bids were reported around $10 per cwt. lower from $135-$140 per cwt. delivered.

Butcher bull prices eased $2.30 per cwt. lower than the previous week to an average of $98.35 per cwt.

Western Canadian non-fed slaughter for the week ending Oct. 24 was down one percent from the previous week at 5,781 head. Year-to-date non-fed slaughter was down 24 percent, totalling 253,055 head.

Good demand should continue for feeder cows, but slaughter cow offerings will seasonally trend larger.

Feeder prices down

The bearish feeder market tone of two weeks ago carried over into last week, and average feeder prices slipped around $6 per cwt. lower. Feedgrain prices softened, and feeder prices rebounded modestly from Wednesday through Friday last week.

Middleweight calves from 400-600 lb. saw prices trend $3-$4 per cwt. lower than the previous week, while slightly larger calves heavier than 600 lb. saw a $5.50-$6.50 per cwt. week-over-week price decline. Big steers heavier than 700 lb. trended sharply $8-$9 per cwt. lower than the previous week, and similar weight heifers generally traded $5-$7 per cwt. lower. The 500 lb. steer calves last week were at the lowest level since September 2017.

Auction volumes during the second half of October are typically some of the largest trading weeks of the year. However, total sale volumes last week were lower than historical at 88,901 head and were 11 percent smaller than a year ago. Marketing appears to be a couple of weeks behind schedule with total year-to-date volumes down 10 percent at 1,077,709 head.

The U.S. Department of Agriculture reports that Canadian feeder exports for the week ending Oct. 17 were lower than the previous week at 2,500 head but were 36 percent larger than the same week last year. Feeder exports to the United States have been larger than a year ago for the past four weeks. Year-to-date feeder exports were down 44 percent, totalling 94,931 head.

Alberta feeder prices steadily declined through October. Alberta feeders continued to trade at a discount to Ontario last week, and calf prices were generally comparable with Nebraska. Feedgrain prices moderated last week and should enhance local buying interest.

Cut-out value eases

In U.S. beef trade, choice cut-out values eased US$1.50 per cwt. lower last week, averaging $207.17, while Select trended fully steady, averaging $1919.23. Oversold U.S. cut-out values and cattle futures rebounded modestly last week, and the beef complex market tone strengthened.

Last week’s U.S. cattle slaughter was expected to be smaller as snow and winter weather forced some Texas slaughter shifts to be cancelled. Holiday buying interest should improve as U.S. Thanksgiving approaches.

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