Western Canadian feeder cattle prices were steady to $2 per hundredweight lower last week. Weakness in the deferred live cattle futures, along with stronger barley prices, set a negative tone.
Larger volume of 800-pound-plus cattle are coming on the market and with cattle-on-feed numbers above last year, demand for replacement cattle is not as strong.
A presort sale in central Alberta saw Simmental-Charolais-cross steers averaging 565 lbs. selling for $177/cwt. Black Angus age-verified steers weighing 670 lbs. were $166/cwt landed in southern Alberta feedlot. A mixed group of black Angus steers averaging 865 lbs. sold for $135 in southern Alberta. Prices on feature quality cattle remain firm but the overall sentiment is somewhat sluggish.
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U.S. second-quarter beef production has potential to be larger than earlier anticipated. Cattle on feed numbers were three per cent higher than year-ago levels as of March 1 and carcass weights are sharply higher. This will weigh on live cattle prices and spill over into the feeder complex.
During April 2011, fed and feeder cattle prices experienced a sharp downward correction and the current environment is conducive for a similar price pattern. U.S. feeder cattle traded $2/cwt lower last week and in some regions were down as much as $5/cwt.
Western Canadian feedlot operators need a fed cattle price of $121/cwt to break even during June and July. Last week, fed cattle traded at $116/cwt as the weaker Canadian dollar supported nearby cash values.
Barley reached up to $232 per tonne delivered southern Alberta, up $2/cwt from a week ago. Feedgrain prices could edge even higher given the historically tight barley carryout.
