Western Canadian feeder cattle markets continue to consolidate at the higher levels. Most auction markets were closed due to the Canada Day holiday, so all eyes were on focused south of the border for market sentiment.
Average U.S. feeder prices were steady to $3 lower at major sales in Oklahoma and Missouri as the U.S. Department of Agriculture forecast lower-than-expected corn acres and smaller stocks as of June 1. Wholesale beef prices were under pressure with U.S. and Canadian packers expecting slower retail demand and an increase in slaughter levels throughout July.
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Steers in the range of 800 to 900 pounds were quoted from $240 to $260 in Manitoba while average Alberta prices for the same weight were $245 to $265. Steers from 500 to 600 pounds were selling in the range of $305 to $335 across the Prairies. The market was difficult to define given the smaller strings of various quality and there were no major features.
Alberta packers were buying fed cattle at $195 this past week; the fed market has now experienced a $9 drop from the early June highs of $204. Packers appear to be well covered for their July requirements, so the market is expected to stay under pressure.
Lethbridge area barley is now trading at $245 per tonne and is expected to remain firm due to historically tight stocks from 2014-15 and lower production prospects on the upcoming crop. Feeding margins are narrowing and expectations are for a softer feeder market when yearlings come on stream in August. It will be difficult to pencil a profitable margin on fresh replacements at the current price levels.
— Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at [email protected] for questions or comments.
