Western Canadian feeder cattle prices once again traded $3-$5 above week-ago levels, with shorter-keep quality cattle as much as $8 higher.
Historically strong feeding margins, along with triple-digit gains in the futures market from Wednesday through Friday, set the positive tone. Feedlots that were holding back on purchases finally stepped forward, pushing the market to preposterous levels. Order buyers were given a fair amount of leeway to obtain ownership and they held no energy back. There was active bidding on all weight categories, with minute discounts noted for fleshier quality. It’s amazing how all types of cattle look a little better in a rising market. By Thursday, purchases in earlier in the week looked quite sensible and order buyers remained overwhelmed with unfilled tickets heading into the weekend.
The feeder cattle market was rather hot in the major feeding regions. In the Lethbridge area, we saw 925-lb. tan steers trade for $179 while 877-lb. tan steers sold for $191. In southern Manitoba, mixed medium- to lower-flesh steers weighing just over 800 lbs. touched the magical $200 level. However, in central Alberta, mixed steers just under 800 lbs. were quoted at $196. Across the Prairies, mixed steers averaging around 650 lbs. were trading from $213 to $217; larger-frame heifers weighing 650 to 675 lbs. were readily selling from $186 to $192. Supplies of lighter-weight grassers are dwindling, enhancing the overall price structure.
The U.S. experienced historically high placements in March while the market was in an upward trend; feeder supplies are now easing, while the fed market continues to percolate higher. Feedlots are shipping slaughter cattle at 1,150 lbs. and there has been a large amount of fed cattle pushed forward. Beef production is coming in lower than anticipated, and adverse wet weather in the U.S. Midwest and southern Plains is generally friendly for cash and futures markets.
— 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.