Compared to last week, Canadian feeder cattle prices were steady to $5 lower across the Prairies while lighter-weight categories suffered a week-over-week decline of $4 to $6.
Feedlots were a bit more aggressive on yearlings as quality backgrounded cattle are starting to dwindle at this time of year. A larger group of larger-frame lower-flesh Simmental mixed steers averaging just under 950 lbs. were quoted at $179 in southern Alberta, which reflected the focus on efficient gains. Heavier steer calves also found steady buying interest in anticipation of lower feed grain prices, longer-term. However, heifers in the 500- to 700-lb. range were extremely variable across the Prairies. Feedlots stepped forward on occasion after seeing the cow-calf operator looking to expand the herd step aside. A smaller group of lower-flesh red heifers weighing just over 800 lbs. were quoted at $174 in central Alberta. In central Saskatchewan a group of larger-frame Charolais mixed heifers averaging 625 lbs. traded for $198 but similar-weight mixed heifers were quoted at $188 landed in southern Alberta.
Demand for grassers was once again very sporadic and it appears the seasonal demand may be evaporating. Farmers are very specialized and contending with a herd of grassers over the summer is out of the question this year for many producers. Southern Alberta and parts of Saskatchewan are contending with drier pastures while Manitoba experienced a dose of winter this past week. Buyers were factoring in a risk discount in the eastern Prairies, which caused a weaker tone on certain groups of calves. Feedlots appear to be carrying sufficient numbers going into the summer and the market sentiment doesn’t warrant additional risk in adverse conditions. U.S. feeder markets were also softer, with most major auctions reporting prices $3-$5 below week-ago levels.
Alberta packers were buying fed cattle in the range of $168-$170. Orders from U.S. packers have carried a small premium but this hasn’t been sufficient to lift the overall complex. The stronger Canadian dollar is limiting the upside while wholesale prices remain under pressure.
— Jerry Klassen is manager of the Canadian office for Swiss-based grain trader GAP SA Grains and Produits. He is also president and founder of Resilient Capital, which specializes in proprietary commodity futures trading and commodity market analysis. Jerry owns farmland in Manitoba and Saskatchewan but grew up on a mixed farm/feedlot operation in southern Alberta, which keeps him close to the grassroots level of grain and cattle production. Jerry is a graduate of the University of Alberta. He can be reached at 204-504-8339.