Fed cattle market weakens
The fed cattle market dropped last week with prices $1-$2 per hundredweight lower early in the week, falling another $1 at midweek, leaving the weekly average nearly $3 lower on steers and $2.25 lower on heifers, said Canfax.
With the U.S. market also falling, feedlots had little choice but to sell. More than 21,500 head traded, up seven percent from the week before, said Canfax.
Even with that movement and about 20,000 head exported, packers’ inventory grew.
Carcass weights have dropped about 20 pounds since the peak a few weeks ago, but are still heavier than a year ago and the five-year average.
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Alberta prices Nov. 9 were steers $82.10 per cwt., flat rail $137.55-$138.25 and heifers $82.65-$82.70.
It will be difficult for the Canadian market to buck the lower fed cattle price trend from the United States, where retail beef demand is weak and the number of market-ready animals is expected to increase.
With adequate local fed cattle supplies heading into December and ample cull cow supplies, Canfax said local packers will not be forced to narrow the basis much from double digit levels.
If the U.S. market struggles in the mid $80s to the end of the year, then Canadian prices will follow, with the only question being whether the basis is $15 under or $10 under, Canfax said. Last year, the November basis average was $14.50 under and December $13.75 under.
Beef lower
U.S. cutouts fell. With more weakness in the Choice than the Select, the spread narrowed.
Movement picked up thanks to the lower cut-out values, with 22 percent more loads trading.
Canadian cutouts gained ground on the U.S., mostly due to stronger middle meat values and the weaker Canadian dollar, said Canfax.
The carcass business is extremely limited in volume. Calgary values are $3 lower for delivery this week, in a range of $140-$142.
Cows are making up a larger percentage of the kill.
Feeders drop
Feeder cattle prices fell in all classes last week, said Canfax.
Light steers 300-500 lb. fell $7-$7.25 and heifers 300-500 lb. were down $4-$4.75.
Steers 500-700 lb. fell $3-$5.75 and heifers 500-700 lb. dropped $1.75-$2.50, steers 700-900 lb. were down $2.75-$3 and heifers 700-900 lb. dropped $3-$4.
Steers 900 lb. and heavier were down $1 and heavy heifers fell $2.
Auction market volume, at 78,025 head, rose one percent over the week before but was 23 percent smaller than a year ago.
Feeder cattle exports dropped 28 percent to 3,557 for the week ending Nov. 4. That was 57 percent smaller than a year ago, said Canfax.
D1, 2 cows dropped $2.25 and butcher bulls were down $2.25.
The cow market will continue to be pushed lower with volumes picking up and cow kill increasing.
Light trade in stock bred cows saw prices move slightly lower, with most at $650-$1,100 and tops to $1,375 and plain types $350-$600.
Bred heifers fell with most at $700-$1,000, tops to $1,310 and plain types $350-$650.
On-feed report
Alberta-Saskatchewan cattle on feed as of Nov. 1 exceeded one million head for the first time since April.
The total was 1,001,473 head, up 10 percent from last year.
The normal pattern is for on-feed numbers to grow from October to November, but the change was smaller than in the past. The increase from October to November 2006 was 13 percent, while 2005 saw a 21 percent increase and 2004 was up 27 percent.
Placements were larger in October than in September, but were down two percent from last year and were the second smallest on record, behind 2003.
Feeder exports from Western Canada to the U.S. totalled 18,552, down 60 percent from last year.
Marketings in October by the Canfax survey group at 186,166 head were 17 percent larger than last year.
Total slaughter in Alberta and Saskatchewan was up 18 percent. Fed cattle exports rose 18 percent, putting total marketings in the two provinces at 221,472 head, said Canfax.
Hog prices fall
Ample hog supplies, falling pork prices and weak packer margins caused U.S. hog prices to fall last week.
The coming American Thanksgiving holiday, with its focus on turkey, is also expected to weigh on hog prices.
The Iowa-southern Minnesota live cash price for hogs delivered to plants was $46.50 US per cwt. on Nov. 10, down slightly from $48 Nov. 3.
The U.S. composite pork carcass cut-out value was $65.26 on Nov. 10, down from $67.50 on Nov. 3.
