Fed cattle weaken
Packer demand softened as wholesale beef prices fell, causing fed cattle prices to drop $1-$1.50 per hundredweight from the previous week, Canfax said.
Steers averaged $93.80 per cwt., down $1.50, and heifers were down 89 cents to $93.20 per cwt.
About 17,500 head sold, down 29 percent from the week before. A lot of cattle were held over into the following week.
Feeders are current in their marketing and might try to wait for higher prices.
The cash to futures basis widened to $8.06 under compared to $2.82 under last week.
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U.S fed exports totalled 8,185 head, down two percent from the week before and 28 percent lower than last year.
Fed prices may be nearing a seasonal bottom, but the economic slowdown in the U.S. has traders worried about demand.
D1, 2 cows in Alberta saw steady demand. Prices ranged from $40 to $62 per cwt. with an average of $50.75 for the week.
About 3,440 slaughter cows and bulls were exported.
Butcher bulls ranged from $45 to $75 and averaged $63, up $2 from the week before and $20 higher than last year.
Expect steady prices this week, Canfax said.
Beef prices fall
U.S. Choice cutout fell $9.29 US to close July 24 at $160.38 while Select fell $5.77 to $155.57, said Canfax. The prices are still $20 higher than last year.
Cutouts will trend lower in coming weeks as beef demand softens due to hot weather.
The Choice-Select spread narrowed to $4.81 compared to $8.33 last week.
Calgary AAA cutouts were $178 Cdn and $174 for AA product. This was $13 and $15 higher respectively than last year.
The Calgary wholesale for delivery this week was $2 lower at $153-$159, while the Montreal wholesale was down $1 at $163.
Feeder cattle dip
About 18,080 feeders traded, up 10 percent from the week before and 32 percent higher than a year ago, Canfax said.
There were few light feeders and lots of cows and bulls.
Steers averaged 74 cents per cwt. lower than the week before and heifers were nine cents lower.
Alberta and Saskatchewan steers weighing more than 700 pounds rose 44 cents per cwt. and heifers were $1.80 higher.
Steers lighter than 700 lb. fell $1.62 and heifers were $1.37 lower.
Feeder exports to the U.S. totalled just 3,863 head, down 50 percent from the week before and 26 percent lower than last year. Export volumes will come under pressure now that the July 15 deadline for country of origin labelling has passed. Canfax expects this will strongly limit feeder exports for the rest of the year unless U.S. packers find themselves short of supply relative to domestic and export demand.
Steady auction market volumes are expected this week with continued strong demand for cows and bulls, Canfax said.
Falling feed prices should see stronger demand for quality feeder cattle, but volumes could be low.
No bred cow trade was reported.
Cow-calf pairs ranged from $700 to $1,350 with an average of $1,014 in light trade.
U.S. cattle on feed
The U.S. Department of Agriculture cattle on feed report showed the July 1 on-feed supply at 96 percent of a year ago, near the average pre-report estimate of 95.6 percent.
June marketings were 92 percent of a year ago, less than the analysts forecast average of 95.1 percent.
June placements were down nine percent compared the average estimate of down 7.7 percent. However, they were not down enough to support futures.
The on-feed numbers are well down from last year, but a lot of cattle are being fed outside of feedlots.
The twice-yearly cattle inventory report put the U.S. herd at 104.3 million head, down from 104.8 million head but above the average pre-report estimate of 104.02 million head. The estimated 2008 calf crop was put at 37.25 million head, down from 37.36 million last year but above the average pre-report estimate of 37.13 million head.
Pork, hog prices climb
Pork cut-out prices rose to near all time highs, which helped raise U.S. cash hog values last week.
Hog weights have declined as producers market hogs early due to high feed costs. Packers with pork orders to fill by weight need to buy more hogs to fill the orders when hog carcasses are lighter.
USDA said the average weight of hogs in Iowa and southern Minnesota in the week ending July 19 was 259.6 lb., down from 260.5 lb. the previous week and 263 lb. the previous year.
Ron Plain of the University of Missouri said in his weekly report that U.S. sow slaughter for the four weeks ending July 12 was up 20 percent after adjusting for herd size. Gilt slaughter for the same period was up two percent from a year earlier.
“The odds appear low for hog slaughter to drop below year earlier levels before the first quarter of 2009,” he wrote.
“With continued growth in live hog demand, we believe the hog industry will become profitable again in the second quarter of 2009, even with continued high feed prices.”
The U.S. composite pork carcass cut-out value July 25 was $85.25 US per cwt., up from $83.11 July 18.
U.S. slaughter for the week ending July 25 was estimated at 2.13 million, down slightly from 2.145 million July 19.
Bison steady
The Canadian Bison Association said markets were slightly stronger at the low end of the range.
Grade A carcasses from youthful bulls in the desirable weight range in Canada rose five cents to $2.15 Cdn to $2.30 per lb. hot hanging weight. Heifers were $2.05 to $2.25 per lb. Cull cows and bulls were 90 cents to $1 per lb.
Lambs down
Ontario Stockyards reported 1,552 sheep and lambs and 198 goats traded July 21. All lambs were steady. Sheep traded steady to higher. Goats were firm.
