U.S. buoys fed market
Surprising strength in the U.S. cash cattle market helped Canadian fed cattle prices to rise.
Prices south of the border rose because the supply of market-ready cattle in the United States is tight, beef prices were up and packer margins improved.
This helped the Canadian fed market to rise on average by $2 per hundredweight.
But that lagged the pace of the U.S. market and Canfax noted that the Canada-U.S. basis widened.
In Canada, trade was slow to develop but by midweek American buyers became active followed by Canadian packers.
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Marketings rose 14 percent to 27,500 head. Feedlots were willing sellers and are current in their marketing, meaning there are no overweight cattle.
In light trade Sept. 9 in Alberta, steers were $83.75-$86 per cwt., flat rail $142-$143 and heifers $83.75-$85.25, flat rail $140-$143.
Canfax said feedlots would want to keep packers’ feet to the fire this week to narrow the Canada-U.S. basis.
U.S. beef soars
Canadian cutouts slipped a bit two weeks ago with the AAA down about 75 cents from the previous week and AA down $2. Cut-out values are expected to firm slightly matching the U.S. trend, said Canfax.
U.S. cutouts jumped with the Choice up $5.70 US from the previous week and the Select up $6.05. This rise was needed to keep pace with the jump in the cash cattle market.
Calgary wholesale prices for delivery this week for steers was $143-$145 Cdn.
Calves under pressure
Feeder cattle market price averages were mostly steady. Yearlings made up most of the volume, said Canfax. Alberta auction market volumes, at about 41,000 head, were up 13 percent from the week before, but down 20 percent from the same week a year ago.
A few more calves were noted in the mix, but it remains too early to say the calf run has started.
Calf prices came under slight pressure, said Canfax.
Steers 300-600 lb. were $1-$3.50 lower, while heifers of the same weight group were steady to $2.50 lower. Steers 600-800 lb. were steady to $1 lower, while heifers 600-800 lb. were steady.
U.S. interest was noted on yearlings as averages were steady for steers 800-900 lb. and heavier. Heifers 800-900 lb. traded $1 higher, while 900 lb. and heavier traded $1.50 lower. D1, 2 cows were $1.75 lower and butcher bulls lost 50 cents.
Given Canadian and American interest, price averages for yearlings are expected to be steady as volumes drop in late September. Significant calf numbers are not anticipated to show up in auction markets until early October, said Canfax.
Stock bred cows in central and northern Alberta were $400-$750, while bred heifers in northern Alberta were $350-$790. Cow-calf pairs in central and northern Alberta were mostly $550-$950.
Feedlots filling
Cattle on feed Sept. 1 in Alberta and Saskatchewan were up 21 percent over last year. More aggressive placements through August held total on-feed numbers higher than in the past two years. However, large marketings caused the on-feed total to decrease seasonally from Aug. 1.
Placements in August totalled slightly more than 185,000 head with the largest placements seen in feeders heavier than 800 lb., a result of grass cattle moving in response to a higher cash feeder market. The marketings of fed cattle in Alberta and Saskatchewan were the largest since October 2001. August marketings totalled 250,676 head compared to July at 215,119 and last August at 195,888 head. The large marketings were a combination of increased slaughter and the resumption of exports of live fed cattle, which totalled more than 28,000 head in August for Alberta and Saskatchewan. Marketing data in August for the Canfax survey group showed 203,479 head, 57 percent larger than last year. The survey group accounted for 81 percent of the total Alberta and Saskatchewan fed slaughter and fed exports.
Hog prices mostly steady
While U.S. hog plant margins edged lower during the week, there was still enough profit for hog buyers to maintain a steady demand at prices that held up better than expected.
The market continued to see a lot of hogs that were held back by the summer heat wave.
The normal seasonal increase in marketings has not yet kicked in, perhaps indicating that pig production last spring might not have been as big as estimated or that more gilts are being held back for breeding.
Analysts also believe frozen pork belly supplies declined at a good pace this summer.
Also positive for the market was the pace of U.S. pork exports, up 26 percent to the end of July compared to the year before.
Chicago lean hogs futures contracts saw nearby months edge lower, but 2006 contract months rose.
The Iowa-southern Minnesota cash price Sept. 16 was $48 US per cwt., up slightly from $47.50 on Sept. 9.
The USDA composite pork carcass cut-out value Sept. 16 was $70.88, down one cent from $70.87 Sept. 9.
Canadian prices are suffering from the steadily rising Canadian dollar.
Sheep steady
Ontario Stockyards reported 2,274 sheep and lambs and 234 goats traded. All classes of sheep, lambs and goats traded at steady prices.
