Compared to last week, western Canadian yearling markets traded $3-$5 higher on average; however, there were a few feature sales quoted $8 to as much as $10 above week-ago levels.
Finishing feedlots were fairly aggressive on backgrounded cattle, which was the main source of yearlings last week. Early grassers are starting to come on the market but there were limited numbers available. Pastures are in excellent conditions across the Prairies, curbing auction market volumes.
The market appears to be functioning to attract supplies and these prices are bound to draw some attention. Many ranchers are choosing to sell direct to the feedlot and bypass the auction ring. This clouds the price discovery but there are still enough cattle to define the price structure. Basis levels for western Canadian yearlings are near historical highs and this probably won’t last. For the finishing feedlot, recent prices don’t quite pencil out based on the deferred live cattle futures but there’s obviously a bullish sentiment longer-term for the fed cattle market. The feeder market always overextends to the upside early in the yearling run and this year is no exception.
In central Alberta, larger-frame lower-flesh steers weighing 1,050 lbs. dropped the gavel at $184 while 950-lb. steers were quoted at $194. In southern Alberta, a larger group of steers weighing just over 800 lbs. sold for $194 while a group of red heifers weighing 854 lbs. were quoted at $166.
Calf prices were relatively unchanged from last week. Finishing feedlots are scurrying to get their hands on these lighter-weight feeders but they’re doing it in a subtle manner. Talk in the trade is that a fair amount of calves moving through the ring are ending up in custom backgrounding lots.
In southern Alberta, larger-frame tan steers weighing 625 lbs. were quoted at $215 and tan heifers weighing 640 lbs. were valued at $193. In central Alberta, mixed steers weighing 740 lbs. were quoted at $204 and red mixed heifers weighing just over 700 lbs. were valued at $184. There was a very light run of feeders under 600 lbs., which made the market hard to define.
— 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.