For the week ending December 28, there were no feeder cattle sales in Western Canada; however, that didn’t stop cattle producers from emailing or calling me over the holidays inquiring about market direction. I thought it would be an opportune time to discuss a couple factors that will influence the market direction over the next couple of months.
In late December, 1,000-pound, lower flesh backgrounded mixed steers were valued in the range of $300-$310/cwt in central Alberta. Higher quality 900 pound steers were quoted from $335 to as high as $350 in the same region. For August and September 2025 delivery, 1,000 pound steers off grass were contracted for $330-$340/cwt which is similar to the highs of August 2024. During the final month of 2024, Western Canadian steer calves averaging 500 pounds were quoted from $500 to as high as $550.
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The feeder cattle cash and futures markets surged in December after the U.S. halted imports of Mexican feeder cattle on November 22 due to a case of New World screwworm in a Mexican animal. It will likely take three or four months for the governments to work out procedures and protocols so that U.S. feedlots can resume the imports from Mexico. Producers need to watch out for announcements regarding the resumption of trade. The market incorporated a risk premium due to short-term uncertainty in feeder cattle. This risk premium will quickly erode once the trade feels comfortable with the expected timeline.
The March feeder cattle futures are trading near contract highs. The managed money position on the feeder cattle futures as of December 17 was 19,116 contracts which is the highest level since June 13, 2024. Without going into detail, the managed money (speculative position) and the commercial position ( the smart money) are at extremes. This is usually a red flag for producers as the futures market may be vulnerable to a correction..
Monday, January 20, is the inauguration day for President Trump. This is his second term in office. In the previous term, when President Trump made “irrational” or “off the cuff” comments, the Agriculture Secretary would fly up to Washington as soon as possible. Trump advisors would discuss and debate why certain statements and implied policies could not be implemented without doing serious harm to U.S. businesses and citizens. I like to be optimistic. Don’t make irrational or emotional decisions from social media chatter. This is not official policy.
I’ve discussed three of six main factors driving feeder cattle market direction. The Western Canadian feeder cattle market summary is posted every Tuesday. The extended version of this summary will be located in the Western Producer starting in mid January. We’ll discuss feeder cattle prices but also factors influencing the feeder market.
— 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.
