Compared to last week, Western Canadian yearling markets dropped $2 to $4 while calf prices sank $2 to as much as $6 on average. Rising feed grain prices set a negative tone. Adverse weather also contributed to lower bids, especially in the lighter weight categories.
Most auction barns had feature calf sales this past week. Larger volumes caused feedlot operators to have scale down orders in place. There was no need to chase the market as buyers sat back and waited for the market to come to them. The quality was quite variable and buyers noted fleshier conditions this past week. Small groups of secondary calves appeared to drag the overall complex lower. Demand from backgrounding operators is lower than past years. There is no risk tolerance and if buyers can’t lock in a profit, they’re not sticking their neck out.
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In Manitoba, a small group of larger frame medium to lower flesh Limousin blended steers weighing 905 pounds were valued at $184; In Central Saskatchewan, larger frame Angus based steers with medium flesh levels averaging 850 pounds were quoted at $185. Just south of Edmonton, Hereford based steers weighing a shade over 800 pounds sold for $187. North of Calgary, medium to larger frame tan heifers averaging 890 pounds were quoted at $170. Yearling supplies were limited and again, the quality was rather poor with most packages discount to feature sales quoted above.
In Manitoba, black steers weighing 750 pounds were quoted at $196 and Charolais based heifers averaging 630 pounds were valued at $175. In Central Alberta, vaccinated mixed steers straight off their mothers weighing 605 pounds were valued at $202 and similar quality group averaging 560 pounds were quoted at $220. In Central Saskatchewan, short weaned black steers weighing 675 pounds were quoted at $196 and similar quality heifers averaging 650 pounds were reported at $177.
U.S. corn offers were up $10-$15/tonne delivered in Central and Southern Alberta; barley prices jumped $8 to $12 on average. The feeder market appears to be incorporating a risk discount to the uncertainty in feed grain prices. Barley supplies are extremely tight and we’re only four months into the crop year. Rail capacity for U.S. corn imports will be stretched to the limits to satisfy feed demand in Western Canada this winter. The feed grain market in Western Canada is in unprecedented territory.
— 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 atResilCapital.com.
