Western Canadian feeder cattle prices were $2/cwt higher to $3/cwt lower last week with each province experiencing a volatile price structure. Adverse weather conditions along with soft cattle futures caused major feedlots to lower their buying ideas.
Certain lots are backed up with market-ready supplies and are looking to liquidate fed cattle before stepping forward for fresh replacements.
The small farmer backgrounding operator took advantage of lower prices but quickly backed away on any strength. This was the first week of the 2012/13 crop year that barley prices eased. Early in the week, barley prices were near $285/mt in southern Alberta but dropped to $278/mt by Friday; however, this had little influence on the feeder market.
Alberta packers bought fed cattle in the range of $112/cwt to $116/cwt last week, up a solid $5/cwt from a week earlier. Feather-light black and red steers weighing 360 pounds sold for $223/cwt in southern Alberta. A small group of silver steers weighing just over 600 pounds sold for $157/cwt at the same presort sale. In central Alberta, Simmental-cross steers weighing 548 pounds sold for $146/cwt. A group of exotic steers weighing 815 pounds sold for $136/cwt.
Overall, buyers reported that the market felt sluggish with limited strict orders coming in from the major feedlots. Presort sales are drawing a very small premium over run of the mill auctions. A larger volume of calves is coming on stream and buyers are showing discounts for any lack of quality. I would not be surprised to see cash barley values reach over $300/mt delivered in southern Alberta this winter. I don't feel this corn rally is over and the world cannot afford a crop problem in South America. Look November feeder cattle prices to remain stagnant as there is no major feature to drive prices higher.
Certain auction markets are advertising bred cow and heifer sales. I feel this is good opportunity to expand your herd because stronger feeder prices are expected next fall. The world will replenish coarse and cereal grain stocks during the 2013/14 crop year causing lower feed grain prices.
Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at firstname.lastname@example.org for questions or comments.