Compared to last week, western Canadian grass yearling prices were unchanged to $3/cwt lower on average. Steers held value but heifers had a softer tone. Calf prices were relatively unchanged from seven days earlier. However, weaker barley prices and stronger deferred live cattle prices limited any slippage.
The calf market continues to be in price discovery mode. Larger groups traded at a premium to smaller packages and the price range for similar weight calves was quite variable. There is a carrying charge reflected in the feeder futures market which has kept all weight categories well supported. Late in the week, a surge in fed and feeder cattle futures enhanced buying interest on heavier yearlings. Alberta packers were buying fed cattle at an average price of $390/cwt delivered. Live prices were quoted in the range of $229-$231/cwt f.o.b. feedlot in southern Alberta, also up $1/cwt. Feeding margins have improved for the January-through-April timeframe, with April live cattle futures nearing the $200 level.
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In central Alberta, Simmental-blended steers with full health records straight off grass averaging 995 lbs. sold for $310 and similar-quality heifers weighing 925 lbs. dropped the gavel at $289. South of Calgary, black Limousin-based steers off pasture with a scale weight of 800 lbs. notched the board at $331. Northwest of Winnipeg, Charolais-based steers with noted weight of 865 lbs. sold for $319 and Angus-blended steers at 811 lbs. silenced the crowd at $325. Yearlings coming from the backgrounding lot continue to trade at a $15-$20 discount to cattle off pasture. In central Alberta, mixed heifers off grass weighing 924 lbs. were quoted at $289 and near Lethbridge, Angus-based heifers on the card at 920 lbs. with light flesh were valued at $270.
In central Saskatchewan, larger-frame mixed steers averaging just over 700 lbs. reportedly sold for $360 and black mixed heifers weighing 712 lbs. apparently traded at $329. South of Edmonton, tan weaned steers on grass diet with full processing data weighing 600 lbs. were last quoted at $381 and mixed weaned heifers weighing 606 lbs. were on the card at $346. North of Calgary, rumour had it that tan weaned steers weighing 560 lbs. ran through the ring at $399.
In Manitoba, Charolais-based steers weighing 515 lbs. seemingly sold for $444. In east-central Saskatchewan, red mixed heifers weighing 530 lbs. reportedly traded at $368. In central Alberta, a smaller group of mixed steers weighing 504 lbs. sold for $428. At a video sale near Lethbridge, a larger group of red steer calves weighing 564 lbs. sold at $396 f.o.b. the ranch.
U.S. feeder markets were US$4-$8 higher last week and the Canadian feeder market is poised to follow suit. It appears feeder cattle supplies outside feedlots are lower than anticipated. Secondly, there are ideas that placements on the U.S. Department of Agriculture’s Cattle on Feed reports were overstated during the summer months.
— Jerry Klassen 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.
