For the week ending Nov. 25, western Canadian yearling prices were $4-$8/cwt lower compared to seven days earlier. However, calf markets were firm trading $5-$8/cwt on either side of unchanged compared to values quoted a week prior.
Optimal weather in southern Alberta caused major feedlot operators to stretch their hands across the Prairies. At the same time, Ontario orders were noted in major Alberta markets with buyers looking for the larger-frame Limousin-type blends. Major feedlot operators were aggressively bidding on larger packages of longer-term weaned calves. Unvaccinated bawlers were discounted severely. Feed grain prices in Alberta and Ontario were softer last week, which contributed to the stronger demand for calves.
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Feeding margins will move into negative territory in January. Given the current value of August live cattle futures, feeding margins are deep in red ink for the summer period. It usually takes about 1.5 rounds of losses before feedlots adjust their purchase price for replacements.
In central Alberta, Simmental-based weaned calves averaging 860 lbs. sold for $305 and similar-quality and -genetic heifers weighing 827 lbs. dropped the gavel at $293. West of Winnipeg, Charolais short-weaned steers weighing 755 lbs. silenced the crowd at $332 and in the Yorkton area, black steers weighing 720 lbs. were valued at $328.
In central Saskatchewan, Angus mixed weaned steers with full health records weighing 710 lbs. were said to have traded for $328 and mixed larger-frame weaned heifers on the card at 690 lbs. sold for $290. North of Brandon, tan semi-weaned steers averaging 640 lbs. were last bid at $382; however, north of Calgary, mixed steers off their mothers and grass with processing records on the card at 635 lbs. reportedly traded for $360.
In Lloydminster, larger-frame tan steers weighing 593 lbs. traded for $376 and black heifers with 550 lbs. supposedly sold for $329. In the Saskatoon region, black steers weighing just over 500 lbs. reached $414. Southeast of Calgary, black Limousin-based steers weighing 530 lbs. apparently sold for $396 and similar-quality heifers weighing 525 lbs. notched the board at $350. At Ste. Rose, Man., the market report had black steers weighing 365 lbs. valued at $479.
The U.S. slaughter has come in lower than anticipated during October and November while market-ready fed cattle supplies are similar to year-ago levels. Cattle on feed 150 days or more are above year-ago levels for the first quarter of 2024. The western Canadian feeder market has significant downside risk over the next four months.
— 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.
