For the week ending Saturday, western Canadian feeder markets averaged $3-$6/cwt higher compared to seven days earlier. Weakness in the Canadian dollar along with strength in the deferred live cattle futures set a positive tone. Recent rains have enhanced yield potential for the Canadian barley crop, which also underpinned nearby cash values. Alberta packers were buying fed cattle around $238/cwt delivered. Feeding margins have improved over the past month and finishing operators are anxious to reload. Calves under 600 lbs. were well bid, with top-quality packages gaining $6-$8/cwt on weekly basis. It appears we’ll eventually see 500-lb. calves trade at $400/cwt. In my straw poll survey, cow-calf producers in Alberta need $2,000 for a 500-lb. steer calf in order to encourage expansion.
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In central Alberta, larger-frame medium-flesh steers on light grain ration with full health data weighing just under 1,000 lbs. charted course at $257 and similar quality 900-pounders silenced the crowd at $283. In central Saskatchewan, Angus-based steers with soft butter weighing 825 lbs. were valued at $292 while their sisters averaging 810 lbs. were bid up to $260.
In the Red Deer region, larger-frame mixed black steers on light grain ration with full health records averaging 760 lbs. reached up to $319. East of Saskatoon, medium- to larger-frame, black, thin 700-lb. steers dropped the gavel at $319; west of Saskatoon, larger-frame mixed 700-lb. heifers with lower flesh levels were quoted at $286. Southeast of Calgary, black Limousin steers weighing 655 lbs. reportedly sold for $335 and similar quality 635-lb. heifers traded for $293.
North of Calgary, tan steers weighing 577 lbs. set the bar at $363 and Simmental-based 500-lb. heifers silenced the crowd at $318. Northwest of Winnipeg, red and black steers weighing 507 lbs. were carried off for $362 and similar quality 450-lb. steers left the yard at $391. South of Edmonton, Angus mixed heifers weighing 380 lbs. sold for $336.
U.S. feeder markets have jumped US$8-$12 over the past two weeks. Given the lower feeder volumes in Western Canada, the domestic feeder markets need to trade at a premium to U.S. values to curb export movement. Seasonally, U.S. feeder markets climb from June through August and this could push up Canadian values. Stronger U.S. demand will set the floor in Western Canada.
— 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.
