Compared to last week, western Canadian feeder cattle markets were relatively unchanged. Higher-quality groups of yearling heifers appeared to trade steady to $2 higher on average while steer markets traded $3-$4 higher to $2 lower. Calf prices are unchanged from seven days earlier.
The rally in deferred live cattle futures has stalled for the time being, which caused finishing feedlot operators to pull in the reins. Ideas are that feeder cattle supplies will increase later in August and September and major operators are waiting to see how the market develops. Hay and straw prices have increased, while interest charges are significantly higher than last year. Comments from buyers suggest feedlot operators are in a “risk assessment mode” and replacements coming into the feedlot don’t quite pencil out. There is a limit how much risk feedlot operators will endure and the feeder market has found that level. Many auction barns remain in holiday mode or had limited volumes with the holiday weekend approaching.
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In central Alberta, larger-frame black mixed mixed steers on light grain and silage diet with full health data averaging 920 lbs. sold for $304. In the same region, tan mixed steers straight off grass averaging 900 lbs. were valued at $315 while tan heifers off pasture weighing 870 lbs. were quoted at $300. Simmental-blended heifers off grass with full health data and a scale weight of 778 lbs. set the bar at $310. In central Alberta, market comments had 850- to 860-lb. high-quality steers off grass moving in the range of $324-$326.
In central Saskatchewan, a smaller group of black steers weighing around 715 lbs. were reported at $330. South of Edmonton, locally-grown red mixed heifers weighing just under 700 lbs. traded for $315.
Southeast of Saskatoon, larger-frame tan weaned steers weighing just over 600 lbs. on pasture diet were quoted at $345 and mixed heifers around 610 lbs. reportedly moved at $328. Near Lethbridge, Angus steer calves weighing 460 lbs. charted the board at $410 and similar-quality heifers averaging 419 lbs. were quoted at $380.
The western Canadian barley harvest is in the early stages and prices have softened. Weaker corn offers in southern Alberta are also dragging barley lower. The Canadian dollar depreciated against the U.S. greenback, which was also supportive. The U.S. Department of Agriculture estimated feeder cattle outside finishing feedlots as of July 1 at 34.3 million head, down 1.3 million head from last year. Looking at past history, this is only 100,000 head above July 1, 2014.
— 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.
