Compared to last week, western Canadian feeder cattle prices were $2-$5 higher on average. Noted strength was in the 700-plus-lb. categories, which spilt over into the lighter calves. Quality groups of yearlings were limited and the scarcity fear factor had a grip on the market. The U.S. Department of Agriculture lowered its fourth-quarter beef production estimate on Tuesday’s WASDE report, which rejuvenated buying enthusiasm.
There is a fair amount of optimism for fed cattle prices over the winter period. Feedlots shrugged off the feed grain rally and the negative margin structure in the nearby positions. Ideas are that the corn market is overextending itself, with high good-to-excellent ratings on the weekly crop progress report. Timely rains are in the forecast, which should also enhance yield potential for feed barley.
Larger-frame tan mixed steers with heavier flesh levels averaging 940 lbs. were quoted at $173 in central Alberta; mixed medium-frame fleshier heifers weighing 900 lbs. were valued at $152 in the same region. In southern Alberta, a small group of larger-frame Angus blended steers averaging 825 lbs. were quoted at $196 landed in the feedlot; the same buyer reported Simmental mixed heifers averaging 750 lbs. moving at $172.
Calves were quite variable across the Prairies. Alberta markets appeared to trade at a premium to Saskatchewan and Manitoba. Drier conditions over the past 30 days have dampened buying interest in the eastern Prairie markets. In central Saskatchewan, a small group of mixed red steers weighing 530 lbs. were quoted at $222; however, in central Alberta, mixed steers averaging 540 lbs. were valued at $226. A small group of Charolais blended steers averaging 525 lbs. were quoted at $229 landed in a southern Alberta feedlot.
U.S. feeder cattle prices were up $2-$5 on average compared to seven days earlier. It appears some areas of the U.S. received traces or no rainfall over the past week, which allowed feedlots to actively purchase replacements. The risk discount due to adverse wet weather may be evaporating.
— 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.Tagged Beef Cattle, beef production, calves, cattle markets, cattle prices, fed cattle, feed barley, feed grain, feeder cattle, feedlots, heifers, steers