Compared to last week, western Canadian feeder cattle markets traded $3 to as much as $6 lower. Alberta feeder cattle prices appeared to move in line with major U.S. markets, which were also down $3-$5 from week-ago levels; however, minimal slippage was noted in eastern Saskatchewan and Manitoba.
Weakness in deferred live and feeder cattle futures mystified feedlot operators. Fear has set in over the past couple of weeks because current feeder cattle prices don’t pencil out. Secondly, most operations are carrying sufficient numbers for the time being and overall demand has softened. The crowds are smaller these days and cattle buyers have periods where the phones are silent.
Alberta fed cattle prices were quoted from $250 to $253 on a dressed basis and $150-$153 on a live basis. The steady tone in the fed market underpinned yearling values. Simmental-cross medium-flesh steers averaging 810 lbs. traded for $203 in central Alberta while similar-quality steers were quoted at $208 in east-central Saskatchewan. Mixed Angus larger-frame medium- to heavier-flesh heifers averaging 950 lbs. were quoted at $186 in southern Alberta.
Semi-weaned and weaned calves were a bright spot this past week. Charolais-cross steers averaging just under 700 lbs. traded for $217 in central Alberta; however, just off their mothers, calves weighing 550 lbs. sold for $225 in the same region. Volatility was noted on similar weight cattle with various features. Unweaned calves experienced heavier discounts and buyers were extremely fussy on quality features. Feather-light calves are viewed as extremely precious for some odd reason. Steers weighing 400 to 450 lbs. traded from $265 to as high as $280 in eastern Saskatchewan.
Feed barley in the Lethbridge area traded from $220 to $225 per tonne delivered last week while imported U.S. corn was quoted from $220 to $223. Feed grain prices appear to be percolating higher, which is throwing a wrench into the margin structure. Weaker live cattle futures and stronger feed grain prices along with uncertainty over NAFTA have buyers on the defensive for feeder cattle.
— 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.