Klassen: Feeder market price discovery continues

In last week’s issue, we mentioned there was a large discrepancy in prices across Western Canada. Compared to the third week of December, prices in Manitoba were up $8/cwt to as much as $15/cwt, while Alberta markets were steady to $2/cwt higher. This past week, feeder prices in the eastern Prairie regions were relatively unchanged while Alberta and Saskatchewan markets jumped $4 to as much as $10/cwt. Prices appear to have leveled out across the Prairies but there were still some noted discrepancies.

The feeder market is being led by Ontario buying interest. Corn is trading at $320/tonne in Ontario but up to $445/tonne in southern Alberta. Secondly, Ontario fed cattle prices are currently $6/cwt higher than in Alberta. Cattle feeders in Ontario have experienced better margins throughout the fall compared to Alberta operations.

Northwest of Winnipeg, a small group of medium-flesh Charolais steers weighing 921 lbs. dropped the gavel at $235/cwt. East of Saskatoon, larger-frame Angus mixed steers with medium to lower flesh levels weighing 830 lbs. were reported at $249. In central Alberta, Simmental-blended steers with full health records on light grain ration sold for $242/cwt. In the Lethbridge area, black steers weighing 950 lbs. were quoted at $221. Southeast of Calgary, a small group of red mixed steers weighing 825 lbs. were quoted at $248.

Northwest of Winnipeg, black steers weighing 605 lbs. silenced the crowed at $287. East of Saskatoon, red Angus-based steers weighing 620 lbs. reached up to $305. Apparently, there was a small group of Charolais steers just over 600 lbs. that touched the $310 level in the same region. At Beaverlodge, Alta., a handful of Simmental-based steers weighing 625 lbs. sold for $251. In the Red Deer region, a handful of vaccinated weaned mixed steers on light grain and silage ration weighing 650 lbs. sold for $260. South of Edmonton, a smaller group of Charolais weaned steers with full health data on light grain averaging 613 lbs. reached up to $299.

North of Brandon, a small group of black and red steers weighing 560 lbs. sold for $320 and similar quality steers averaging 450 lbs. sold for $335. Near Lethbridge, black steers weighing 520 lbs. sold for $321. In central Alberta a group of mixed steer weighing 565 lbs. sold for $314.

Alberta packers were buying fed cattle at an average prices of $312/cwt delivered, up $2/cwt from seven days earlier. Carcass weights are now below year-ago levels and it appears that the fed cattle basis is improving. This should be supportive for the feeder market in Alberta.

— 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.