Compared to last week, western Canadian yearlings sold $3 to as much as $6 higher while calf markets were relatively unchanged. Feeder cattle futures experienced a $5-$7 rally, which quickly renewed optimism in the cash trade. Ideas that yearling supplies will drop below year-ago levels on both sides of the border this August spurred on buying interest from major operations. Feedlot operators were quite aggressive in all weight categories, easily outbidding the farmer-cattle producer for those feeders that were fit for grass. Southern Alberta buying interest once again stretched across the Prairies, setting the price structure with limited orders coming from Eastern Canada and U.S. buyers. Limited slippage was noted on poorer-quality yearlings. Lower available supplies have caused the quality spreads to narrow, especially on fleshier cattle.
Yearlings weighing over 900 lbs. are hard to come by at this time of year so the few packages on the market tend to stand out. In southern Alberta, Simmental-cross larger-frame steers averaging around 920 lbs. were quoted at $174. In central Alberta, medium-frame low-butter black Angus-cross steers averaging 850 lbs. sold for $185; red mixed heifers with medium flesh averaging just over 825 lbs. sold for $159. Larger-frame mixed steers with no special feature and weighing just over 730 lbs. were quoted at $702 in central Saskatchewan.
Many areas of Western Canada received timely rains this past week, which increased competition for the lighter weight categories. Eastern Saskatchewan markets traded at a slight premium. There were smaller groups of steers weighing 600-625 lbs. that traded up to $225-$230 in this region while similar-weight steers were $5-$8 lower in Alberta on average. In south-central Alberta, tan larger-frame 680-lb. steers traded for $212 while Charolais-cross heifers averaging just under 600 lbs. were quoted at $192.
Lethbridge barley was trading in the range of $160-$165 per tonne last week, up $3-$5 from seven days earlier. Barley stocks will drop to historically low levels at the end of the 2017-18 crop year, which will keep the market quite firm until new crop. The feed grain complex will have more of an influence on the feeder market over the next couple of months.
— 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.