Compared to last week, western Canadian feeder cattle markets traded $2-$3 on either side of unchanged. In central and southern Alberta, quality yearling steers weighing 800 lbs. continue to hover at the psychological range of $200-$210; lower-flesh steers fresh off grass weighing 900 lbs. are readily quoted in the range of $185-$190. Saskatchewan values are at a $4-$6 discount to southern Alberta.
Drier conditions across the Prairies appears to have limited the upside in the feeder market for the time being. However, ranchers are holding onto calves and yearlings as long as possible. In Saskatchewan’s crop report for the week ending July 5, hay and pasture topsoil moisture conditions were 87 per cent short to very short.
Deferred live cattle futures continue to percolate higher and major feedlot operators are anxious to secure ownership sooner, rather than later. There is strong buying interest underneath the market given the favourable margin structure. Feedlot operators are securing feed grain requirements and then looking to buy feeders accordingly. The weaker Canadian dollar last week also underpinned the feeder complex.
In central Alberta, mixed steers on full health program weighing just over 900 lbs. on light barley ration were quoted at $187. A small group of larger-frame tan steers weighing 920 lbs. fresh off grass were quoted at $191 landed in the feedlot in southern Alberta; similar-quality heifers weighing 850 lbs. were valued at $176 in the same region. In central Saskatchewan, larger-frame black steers weighing 860 lbs. were quoted at $182. In the Lethbridge area, larger-frame thin Simmental-based steers average a shade over 800 lbs. were quoted at $211.
The calf market appeared to be sluggish compared to yearlings. Major finishing operations are not interested in calves at this time of year and backgrounders are on the sidelines. South of Edmonton, mixed medium-frame weaned steers weighing 620 lbs. were valued at $224 and black weaned heifers weighing 610 lbs. were quoted at $193. Southeast of Saskatoon, mixed semi-weaned steers averaging 605 lbs. were valued at $215. In the Lethbridge area, there were some Charolais-based heifers (530 lbs.) valued at $204. Singles and rough-looking stragglers were discounted with limited demand surfacing for these types of animals. There is no demand for grassers given current conditions.
The next 30 days will determine the feed grain supply in North America. Buyers will be more confident later in August once feed grain offers are more readily available. Barley, wheat and corn are hard to buy at this time of year.
— 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.