The Western Producer
October 31, 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.
Fed steer price slips
After gaining $7.50 per hundredweight over the past five weeks, weighted average fed steer prices took a step backward, dropping $2 per cwt. last week to average $141.77. Fed heifers averaged $142.06 per cwt., down 91 cents per cwt. from the previous week.
In Western Canada, marketing pressure was evident last week as there are some big cattle standing in feedlot pens. With these big cattle, producers were looking for a quick slaughter date to avoid heavy carcass discounts. Some sales were reported flat with no weight breaks, while on other sales, packers were discounting carcasses weighing more than 1,050 pounds.
Last week, dressed sales were reported from $235-$242 per cwt. delivered. Lift dates varied, but most of the cattle traded were being scheduled for delivery the week of Nov. 18.
Alberta fed prices traded at roughly a $2 per cwt. discount against the Nebraska market, assuming they trade at US$110 per cwt. Cash to futures basis levels strengthened last week to -$2.62 per cwt., right in line with the three-year weekly average of -$2.47 per cwt.
Canadian beef cut-out values were one to five percent higher than last year, while fed cattle prices were around five percent lower year over year, suggesting packer margins are well in the black.
For the holiday short week, western Canadian fed slaughter volumes totalled more than 41,000 head. For this particular week, it was the biggest weekly slaughter since 2004.
In Eastern Canada, dressed sales were reported from $234-$236 per cwt. delivered. It has been more than one month since shutdown, but one small plant still remains off line. Even though some cattle are being rerouted and slaughtered elsewhere, cattle are starting to back up.
It could be related to the plant fire in Kansas, but there have been reports some Canadian cattle that were originally contracted to go to the United States for slaughter have had the contracts mutually voided, and these cattle are being sold on the cash market. Seasonally, there is still more upside to the fed cattle market.
In the U.S., dressed sales in the north were reported from US$174-$175 per cwt., and live sales were reported from $110-$111. Prices were steady to slightly stronger than the previous week. U.S. calf prices are $18 per cwt. lower than last year, while feeders are $9 per cwt. softer. For the week ending Oct. 12, beef cow slaughter totalled 65,192 head, which was 11 percent larger than last year. The previous two weeks have seen the largest cow slaughter volumes this year.
Non-feds hold steady
Alberta non-fed prices trended fully steady last week on a moderate offering and good demand. D2 slaughter cow prices traded C$6.81 per cwt. higher than a year ago, averaging $87.10, and D3 prices were almost $5.50 per cwt. higher, averaging $76.25.
Non-fed dressed cow bids have now traded sideways at $165-$170 per cwt. delivered for the past five weeks. Butcher bull prices firmed $1.35 per cwt. higher last week to average $103.75.
Western Canadian non-fed slaughter volumes for the week ending Oct. 19 were five percent larger than the previous week at 6,831 head. Slaughter cow prices this week are anticipated steady on a limited offering during the calf run. Strong trim values are beginning to seasonally soften but will remain supportive.
Auction volume surges ...
Cutouts higher ...