Klassen: Feeder cattle prices remain firm

Western Canadian feeder cattle prices were relatively unchanged from week-ago levels, although larger groups of quality cattle were priced $3-$5 higher. Most auction barns reported small packages on offer with a larger variance in quality. However, there was limited slippage, even on late stragglers.

Prices were rather surprising, with one producer noting that medium-frame, medium- to heavier-flesh mixed steers weighing just over 700 lbs. brought back $233 in central Saskatchewan. In normal markets, these cattle would have been discounted, but with fewer numbers available, feedlots were rather aggressive on larger packages. Feeder cattle futures ratcheted up near contract highs this week, which also reinforced the buying interest on all weight categories. In central Alberta, Charolais-cross steers weighing just over 800 lbs. sold for $210 while mixed heifers averaging 825 lbs. sold for $197.

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Demand for grassers appears to have subsided at this time of year, especially with Manitoba and southern Saskatchewan experiencing drier conditions. Calves are fairly priced or slightly discounted relative to shorter-keep replacements, which continues to spur on buying interest. In central Alberta, mixed steers averaging 550 lbs. reached up to $262 and 625-lb. mixed heifers traded for $212. In Manitoba and Saskatchewan, smaller packages were on offer with prices slightly discounted to major markets in Alberta. The industry is anticipating large supplies of yearlings this fall but with the upward trend in place, waiting is not an option. Feedlots are anxious to secure a portion of their fall yearling supplies at a decent price.

Alberta packers were buying fed cattle from $167 to $169, down about $3-$4 from last week; prices in the U.S. southern Plains were actually US$3-$4 higher, reaching US$137. Beef production is coming in lower than anticipated and market-ready supplies are rather snug on both sides of the border. Wholesale beef prices remain firm, encouraging the slaughter pace.

— 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.

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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.

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