The Western Producer (Canada)
May 9, 2019
This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.
Bearish in fed market
Fed steer and fed heifer prices were lower last week by $1.23 per hundredweight for steers to average $161.20 and by 83 cents per cwt. for heifers, which averaged $159.66.
Alberta direct cattle sales saw active trade. The United States fed market set an early bearish market tone and local feedlots aggressively marketed fed cattle on a stronger basis following last week’s live cattle contract roll. The majority of sales were reported dressed from $270-$271 per cwt. delivered, which was $2-$3 per cwt. lower than the previous week’s rail average.
Total weekly sale volumes were the largest seen so far this year. No significant price premium was reported for yearlings and most of last week’s fed offering was first sort calves.
Last week’s cash to futures basis strengthened significantly to +8.22 and aligned with the five-year historic May basis of +8.58.
Western Canadian fed slaughter for the week ending April 27 realigned 29 percent larger than the previous week to a respectable 41,262 head. Year-to-date western fed slaughter was nine percent larger, totalling 598,304 head.
Canadian steer carcass weights were bolstered four pounds larger than the previous week by heavy eastern Canadian carcasses, while western Canadian steer weights eased six pounds lower, averaging 872 lb.
Canadian fed cattle-slaughter cow exports to the U.S. for the week ending April 20 rebounded after the Easter long weekend, up 14 percent compared with the previous week at 10,478 head.
Feedlot supplies remain generally current and carcass weights are expected to remain manageable. Significant volumes of fed calves are not anticipated until the second half of May.
In the U.S., active trade mid-week saw live prices generally US$3-$5 lower than the previous week at $122-$123 per cwt. in the south. Northern sales were $3-$5 lower with lives sales from $123-$124 per cwt. and scattered dressed trade at $198-$200 per cwt.
Steer carcass weights for the week ending April 20 slid seven lb. lower than the previous week but were one lb. heavier than the same week last year.
Rough ride for feeders
In the feeder market it was a rough week. Feeder cattle futures had a strong $10 per cwt. rally over the past few weeks and were overbought. Last week the U.S. fed cattle market reacted to the fact that spring highs were likely over, and they focused on growing fed supplies.
The softening fed market combined with the large U.S. feeder placements this spring brought a massive correction to fall feeder futures of $15 per cwt. in the last two weeks. They are now at their lowest level of the year.
The negative market tone weighed on the local calf and feeder market. Both stocker calves and feeders saw prices decline mostly $3-$8 per cwt. from the previous week. Varying quality on the light calves may be also playing into some of the larger week-over-week price drops. Despite Western Canada importing a significant number of calves in the last few months, U.S. interest and feeder exports continue stronger than a year ago.
However, welcome moisture in parts of ranch country could be supportive to the stocker calf market in some areas. Heavy feeders could stay under pressure in the near term, given the current market tone. Feedlots have had limited profits in the last few months.
Cows, bulls jump ...
Cutouts lower ...