Compared to last week, western Canadian yearling markets traded steady to $2 lower while calves traded $3 higher to as much as $8 lower. Adverse weather across much of the U.S. Midwest set a negative tone on both sides of the border. U.S. feeder cattle markets were down US$3-$6 from seven days earlier.

Corn futures appear to be incorporating a risk premium due to uncertainty in production. Weather forecasts call for significant rainfall over the next seven days. Feedlots are hesitant to bid up on feeders because they don’t know where these feed grain prices will be, come new crop.

Alberta packers were buying fed cattle on a dressed basis in the range of $253-$255 delivered, down from week-ago levels which ranged from $258 to $263. On a live basis, fed prices were quoted at $152-$153, about $8 below breakeven pen closeouts.

In southern Alberta, a larger group of medium-frame Hereford mixed steers with medium to heavier butter levels weighing just over 900 lbs. sold for $176; black steers weighing 847 lbs. were quoted at $183. In central Alberta, Simmental mixed steers weighing 740 lbs. were valued at $197 while larger-frame Angus-blended heifers averaging 760 lbs. were quoted at $165.

Lighter calves were quite variable depending on the region. Volumes under 700 lbs. were limited and major feedlots were the main buyers. Ideas are that yearling supplies will be tighter than expected come fall and larger operations wanted to secure numbers for the earlier winter fed cattle market. The feeder market is always anticipating the fed cattle situation five to seven months forward and we all know how quickly the market can change.

In southwestern Manitoba, tan steers averaging 515 lbs. were quoted at $228; a mixed group of black heifers weighing just over 550 lbs. were quoted at $195. In central Alberta, medium- to larger-frame Angus-based steers weighing 645 lbs. were valued at $221 while medium-frame heifers weighing 645 lbs. were quoted at $191.

— 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.