Compared to last week, western Canadian yearling markets were down $2-$5 while calves dropped by $3 to as much as $8. We’re now seeing some medium-quality calves weighing around 550 lbs. sell under the psychological $200 level in central Alberta.
The market is lacking demand. Feedlot inventories are running 33 per cent above the five-year average. Most operations have sufficient ownership for the time being. The deferred live cattle futures dropped $3-$4 on the week; corn futures are up about 20 cents per bushel from mid-October. The feeder market has been quick to adjust with razor-thin margins for the finishing lot. The quality of calves were fleshier last week. Temperatures are near freezing across the Prairies with some light rains noted in certain locations. It appears the feeder market is incorporating a small risk discount with the onset of transportation health issues. Fancier lightweight calves held premiums; there were also some farmer-cattle producers sticking their neck out for grass-type cattle.
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Quality yearlings are hard to find but there were a few late bloomers coming on stream. A small group of mixed steers averaging just under 850 lbs. were quoted at $186 in southern Alberta. South of Edmonton, mixed heifers off grass weighing 915 lbs. were valued at $172. Northeast of Calgary, medium- to larger-frame mixed steers with little flesh weighing 825 lbs. were reported at $188 and mixed heifers on light grain averaging 820 lbs. were quoted at $173.
In central Alberta, a small group of Simmental/Angus-blend steers with full health records straight off their mothers averaging 570 lbs. reportedly sold for $195; similar-quality and -detailed heifers averaging 510 lbs. were valued at $187. In Manitoba, larger-frame Charolais-based weaned steers weighing just over 700 lbs. were quoted at $206 and similar-quality heifers averaging 695 lbs. were quoted at $167. Southeast of Saskatoon, Hereford-based bawling steers weighing 625 lbs. were quoted at $206 and Angus-based semi-weaned heifers weighing 600 lbs. were valued at $173. In southern Alberta, tan steers weighing 550 lbs. were quoted at $213 and similar-quality heifers averaging 510 lbs. were valued at $191.
A huge calf run is expected in November. The export market will set the price floor and there is no doubt Ontario hands will reach into Alberta. Prices are now at levels where we are finding all types of demand. The market is aggressively searching for buyers through lower prices.
— 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.
