Fed cattle prices steady
Last week’s fed cattle price averages were steady, with the lower steer average offset by a higher heifer average, reflecting quality issues, said Canfax.
This report covers to June 29. June 30 will be included in next week’s
report.
Volume was good. Packers were active bidders. Some still have fairly limited on-hand supply.
With most plants working only four days because of the July 1 holiday, trade was mostly for this week’s slaughter.
A few more cattle were in the mix because some cattle came out of the set-aside program.
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Muddy feedlots continue to hamper weight gains, said Canfax.
Slaughter steer weights are less than 800 lb. compared to 812 lb. a year ago, showing how current feedlots are.
Alberta prices June 29 were steers $79.75-$81.95 per cwt., flat rail $132.95-$135.40 and heifers $79.75-$81.60, flat rail $132.95-$135.50.
With feedlots current and packers active, prices should be steady, Canfax said.
The second week of July should see a few more released set-aside cattle, but short-bought packers might like the look of longer fed cattle for better grading.
Canada-U.S. basis levels of $20-under should be maintained through July, but a falling U.S. market could still drop Alberta prices into the high $70s.
As key U.S. court dates for BSE rules approach on July 13 and 27, speculation might increase.
Heavy feeders rise
Strong heavy feeder cattle prices continued to be the hot topic, Canfax said.
Alberta auction market trade was 57 percent larger than a year ago.
With few lighter grass cattle on offer, steers 400-700 lb. traded 25 cents-$2.25 lower, while heifers of the same weight category were 25 cents-$4 higher.
Steers 700-900 lb. and heavier rose $1.75-$3.75 with the most strength in the 800-900 lb. category.
Heifers 700-900 lb. and heavier traded $2.75-$3.75 higher.
D1, 2 cows and butcher bulls traded steady to 50 cents higher.
Demand for heavy feeder cattle is expected to remain strong in the short term while volumes remain seasonally small, said Canfax.
News that the fed cattle set-aside program will be extended to March 2006 should also add support to heavier feeder cattle.
The feeder market might also become more volatile in July as U.S. court proceedings take place.
Stock bred cows and heifers in northern Alberta were $300-$650.
Cow-calf pairs were mainly $500-$800 with tops up to $1,200 in northern Alberta.
Beef turns corner
Canadian cutouts two weeks ago fell with the AAA down $4.50 per cwt. and the AA down $3.85. Cutouts are now about 10 percent lower than a year ago.
But prices were expected to stabilize last week. U.S. cutouts last week gained back $2 after falling over the past several weeks with the Choice closing June 29 at $136.33 and Select at $133.46.
U.S. cutouts are four to five percent lower than last year.
Canadian movement was considered good heading into the holiday weekend. Extremely hot weather in the East could keep a lid on middle meat sales.
Calgary wholesales for delivery this week settled steady at $137-$142.
Hogs might rebound
Negative pork plant margins and recent losses in cash pork prices discouraged higher cash hog bids last week.
Hogs in Iowa and southern Minnesota delivered to packing plants were $48 US per cwt. on July 1, down $1 from the week before.
The USDA estimated pork carcass cutout July 1 was $64.64 per cwt. compared to $64.90 at the end of the previous week.
Cash hogs were expected to be steady to stronger this week because pork plants may not have a lot of hogs contracted and will have to rely on supplies from the spot markets, an Ohio dealer told Reuters.
Other dealers said plants might have to bid steady or higher to compete for hogs. Hog prices have trended lower recently, which slowed marketings.
After a volatile week when traders were questioning whether the discovery of a U.S.-born BSE case would affect beef demand, Chicago lean hog July futures closed July 1 at $66.30, up from $65.65 June 24.
Analysts now believe pork demand, which has been weak and has depressed hog prices, will start to pick up, not because of a consumer concerns about beef, but rather because pork prices have dropped.
Ron Plain of the University of Missouri noted last week that in the January to May period, U.S. pork demand was down 2.8 percent, beef down 0.8 percent, chicken up 4.1 percent and turkey down 6.8 percent.
Sheep steady
Ontario Stockyards reported 2,117 sheep and lambs and 188 goats sold.
All light lambs traded steady, with heavier lambs barely steady to $10 per cwt. lower.
Sheep and goats were steady.
