Fed cattle surprise
A strong U.S. market, driven by unexpectedly strong demand, tight supply of Choice cattle and good packer profits, helped propel Alberta fed cattle prices higher last week.
Price averages were $1.75-$2.25 per hundredweight higher as active bidding saw prices move back to the $90 mark on the top end of the price ranges, a level not seen since late in the first quarter and well above what was expected for this summer.
Volume traded rose five percent to slightly more than 23,000 head, cleaning up the week’s showlist and anything carried over from the week before, reported Canfax.
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Alberta prices June 29 were steers $88.70-$90.50 per cwt., flat rail $146.90-$148 and heifers $148.
The national holidays in Canada and the United States slowed packer activity this week.
Canfax said that because 2006 is shaping up to be anything but normal, steady pricing in the upper $80s is expected this week.
The number of cattle on offer is expected to be steady over the next few weeks and limited U.S. interest on top end Choice cattle will slightly reduce the supply in the domestic system.
Beef demand usually starts to drop in July. U.S. carcass weights are rising. Once the U.S. market stalls, so will the Canadian rally, Canfax said.
China said June 30 it would resume imports of beef from U.S. cattle younger than 30 months.
Beef stronger
Calgary wholesale beef prices for delivery this week rose to $147-$150, $4 higher than the week before, said Canfax.
The Canadian cutout was stronger two weeks ago but likely dropped last week as packers reported lower trades on top butts and short loins.
The U.S. cutout traded $1-$1.50 US higher, making it three consecutive weeks of increases.
It is rare for the cutout to be trading in the low $150s, compared to mid $140s in May and low $140s in April.
The $20 or more spread in Choice-Select supported the cash market and packer margins.
Beef movement typically slows in July, but 2006 has been hardly typical, said Canfax.
Heavy feeders rise
Even with limited offerings of feeder cattle, prices rose in most classes.
With a solid market in heavy feeders, it is becoming attractive for producers to price grass cattle for delivery in August or September, Canfax said.
Heavy steers 800-900 pounds and heavier rose by $1.75-$2 per cwt. and heavy heifers were up $1.50-$2.
The heavy steers at the top end were $4 higher, and 900 lb. and heavier steers were $3 higher on the top end compared to the week before.
Steers 300-600 lb. rose 50 cents-$2.50 and heifers 300-600 lb. fell 25-50 cents on a limited test.
Steers 600-800 lb. rose 25 cents-$1.25 and heifers 600-800 lb. were up 75 cents-$1.25.
Alberta feeder auction market volume was down 11 percent from the week before, but up 25 percent from last year.
D1, 2 cows fell $1 but butcher bulls were steady.
Canfax said producers would probably be inclined to continue to price grass cattle for late summer or early fall delivery.
Feeder cattle exports for the week ending June 24 were 1,969 head. Exports will dwindle in coming weeks.
Stock cow-calf pair prices fell, with most at $1,000-$1,475 and plain types $650-$950.
Bred cows rose to $900-$1,400 and plain types to $450-$850.
Medium quality bred heifers in northern Alberta traded lower at $450-$850.
Cash hogs sharply lower
The U.S. June 1 hogs and pigs report released June 30 showed the American herd unchanged from a year ago.
This was considered supportive to futures prices because analysts had expected a one percent increase in herd size.
U.S. cash hogs were sharply lower last week as slaughter plants reduced hours and most closed for the July 4 holiday.
The restricted production helped plants increase their margins, which had been in negative territory the week before.
The Iowa-southern Minnesota live cash price for hogs delivered to plants fell to $53.50 US June 30, down from $59.50 on June 23.
The composite pork carcass cut-out value fell to $77.83 June 30 from $82.48 June 23. The falling cut-out value, despite reduced packer operations, indicates that seasonal demand has likely peaked.
Federal slaughter in the U.S. was estimated at 1.84 million last week, up slightly from 1.83 million the week before. To date, U.S. hog slaughter is 0.1 percent below the pace set last year.
Light lambs down
Ontario Stockyards reported 1,917 sheep and lambs and 254 goats traded last week. Light lambs traded $5-$7 Cdn cwt. lower, while heavy lambs were barely steady. Sheep and goats held firm.
Beaver Hill Auction in Tofield, Alta., reported 706 head sold June 26.
New-crop lambs less than 70 lb. were $138-$143 per cwt., 70-85 lb. were $132-$140 and 86-105 lb. were $133-$138.
Old-crop lambs 86-105 lb. were $100-$124. Lambs heavier than 105 lb. were $121.
Replacement ewes were $55-$86 per cwt. Cull ewes were $35-$55. Ewes with lambs were $150-$175.
Rams were $45-$70 per cwt.
Good kid goats were $160-$220 per cwt. Nannies were $75-$129 and mature billies were $180-$222.50 per cwt.
