Fed cattle rally
The North American cattle market jumped higher last week, fueled by a combination of reduced supply of market-ready cattle and the damage done by a string of snowstorms in the United States.
Fed cattle traded $1.15-$2.25 per hundredweight higher but frustrations in Canada continued over the wide basis levels, said Canfax.
Steers traded $90-$95 per cwt. live and $153-$157.80 rail.
The live average was $93.40, up $1.25 from the week before. Heifers were $90-$94.65 live and $153-$159 on the rail to average $93.46, an advance of $2.25.
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With slightly fewer than 18,000 head sold, some producers rejected bids while others chose to sell only part of their show lists, given the inability of the local market to keep up with the advancing U.S. market.
The week’s Canada to U.S. cash-to-cash basis was $19.45 under, up $2.40 from $17.05 under the week before. Given the wide basis, it is no surprise to see fed cattle exports maintaining a steady pace, with 21,275 head exported two weeks ago.
It was the third consecutive week of $90 or better weekly average pricing, a strong breakout from the range of the previous 52 weeks of $84 to $88.50.
With the trend broken, fed prices should trade in a higher range in March and April and potentially through May as well, said Canfax.
Offerings are not expected to grow into April and fed cattle prices are expected to climb.
Beef moves higher
Retailers are going to feel the pinch next week with packers increasing their prices to cover the increases in the fed cattle market in Canada and the U.S., said Canfax.
The U.S. Choice cutout rose by $9.64 US to $158.04 and Select climbed by $6.59 to $148.50.
The Choice-Select spread is $9.54, a $3.05 increase from the week before. U.S. box beef movement was light to moderate.
Canadian cutouts lost some ground in late February with AAA down $3.18 Cdn at $173.30 and AA down $2.03 at $168.47.
The AAA-AA spread narrowed at $4.83.
Packer kills are steady and some might be long on inventory. The Calgary wholesale market for delivery this week rose $6-$7 to $158-$160.
Feeders rise
Feeder cattle prices followed the stronger fed market, recovering some of what they lost two weeks ago, said Canfax. Prices had a firmer undertone when the futures skyrocketed March 8.
About 55,000 head sold at auction, up seven percent from the week before and four percent larger than last year. To date, 359,500 have sold at auction, up two percent over last year.
Light steers and heifers 300-600 pounds rose 50 cents-$2.25, while those weighing 600-800 lb. were steady to $2.50 higher. Heavy steers and heifers were steady to $1.50 higher.
For the week ending March 3, 8,514 head of feeder cattle were exported, an increase of eight percent from the week before.
Butcher cows were steady to 50 cents higher and butcher bulls were down 75 cents.
The feeder market should remain strong. Grain futures are trading lower and feeder cattle futures are mixed. Volumes should continue to be strong, which will help draw buyers, but quality may also influence prices in the ring.
In stock cow trade, prices rose. Bred cows were $800-$1,100, with plain types $450-$750.
Bred heifers were $850-$1,100 and plain types $450-$800. Cow-calf pairs were $850-$1,000, with tops to $1,300 and plain types $600-$800.
Hog market surprises
U.S. hog prices held firm despite an increase in deliveries as producers moved hogs that had backed up during recent storms.
Rising margins allowed packers to increase slaughter. Lighter than expected carcass weights also supported hog prices.
Iowa-southern Minnesota prices March 9 were $47.50 US per cwt., up slightly from $47 March 5.
The U.S. composite pork carcass cut-out value was $68.85 March 9, up from $67.19 on March 2.
