Compared to last week, western Canadian feeder cattle markets were relatively unchanged but a softer tone was noted in the non-major feeding regions. Most auction barns are in summer mode and the quality of feeders coming on the market is quite variable. However, at major centers in Alberta, healthy strings of yearlings were well bid and there is no shortage of demand for grass cattle and calves. Weakness in the fed cattle market tempered the upside for feeder cattle.
Alberta direct cattle sales were reported on a live basis from $135 to $138 f.o.b. the feedlot, down from last week’s range of $148-$152. There is a backlog of market-ready supplies on both sides of the border so feeding margins will remain under pressure over the next couple months. The optimism that was evident last week appeared to evaporate as finishing feedlots come to terms with the overall fundamentals. Weakness in the deferred live cattle futures set the tone for the nearby feeder complex. U.S. feeder cattle supplies are quite burdensome in the short term so U.S. beef production may be higher than anticipated in the final quarter of 2020 and first quarter of 2021.
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In the Lethbridge area, a larger group of medium-flesh red steers averaging 839 lbs. reportedly sold for $186; in central Alberta, tan mixed steers averaging 900 lbs. were quoted at $176 while Hereford-based heifers averaging just under 850 lbs. were valued at $156.
In west-central Alberta, larger-frame thinner black steers weighing 750 lbs. were quoted at $198 while similar-quality and -weight heifers were reported at $172. Much of central Alberta has received over 150 to 200 per cent of normal precipitation over the past 30 days. Some feedlots are contending with adverse pen conditions, which caused certain buyers to back away from the market this week.
Small strings of calves were available last week; it wasn’t uncommon to see one to five head of late stragglers or thin bloomers run through the ring. Quality groups of 500- to 525-lb. steers were trading in the range of $235 to as high as $250 in central Alberta, while in central Saskatchewan, similar-weight feeders were $228-$240. Volumes in the lower weight categories were thin so the market was hard to define. A larger group of tan heifers weighing just under 550 lbs. were quoted at $201 in central Alberta. Red mixed steers averaging 680 lbs. were quoted at $210 in central Alberta while mixed heifers weighing 630 lbs. were valued at $186.
— 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.
