Western Canadian yearling markets appeared to stabilize after coming under pressure earlier in the month. Compared to last week, yearling prices were unchanged to $4 higher on average while calf markets traded $2-$3 on either side of unchanged.
Major feedlots were more aggressive for 800-plus-lb. cattle as feed grain prices continue to grind lower. Favourable weather in the major feeding regions of Alberta enhanced buying enthusiasm. There appeared to be pent-up demand. Operations that were quiet earlier in the month decided now was the time to increase ownership, especially in southern Alberta. The quality of yearlings was quite variable, with fleshier cattle noted in certain regions. Grass conditions have improved late in the season causing ranchers to delay sales in the eastern Prairie regions. The yearling run may be drawn out longer than earlier anticipated. U.S. feeder cattle prices were $3-$5 higher last week, with feeder cattle futures leading the charge higher.
In central Alberta, medium-frame mixed steers with light to medium flesh levels weighing just under 1,000 lbs. were quoted at $177 and similar-weight and -quality heifers were valued at $165. In the Lethbridge area, medium-frame lower flesh steers weighing 850 lbs. were valued at $208 while Charolais-blended heifers averaging just over 800 lbs. were quoted at $189. Many auction barns held feature yearling sales which attracted a larger buying crowd.
Calf prices were quite variable across the Prairies which made the market hard to define. Depending on the quality there was quite a difference between Alberta and Manitoba, with Saskatchewan prices fluctuating in the middle of the range. Charolais steers averaging 625 lbs. were quoted at $227 in Manitoba, whereas in central Alberta, black steers weighing 640 lbs. were valued at $210. Lighter-weight feeders were relatively flat across the Prairies. In the Lethbridge area, red steers weighing 518 lbs. were quoted at $226 while in Manitoba, red steers weighing 500 lbs. were valued at $223.
Friday’s Cattle on Feed report from the U.S. Department of Agriculture was considered friendly to the feeder market, as August placements came in nine per cent below year-ago levels. This report comes on the heels of USDA’s Sept. 12 WASDE report which showed a year-over-year decline in fourth-quarter beef production. The market is digesting some positive news which has underpinned buying interest in the feeder complex.
— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.