Compared to last week, western Canadian yearling prices were unchanged to as much as $4 higher in some cases; calf markets traded $2-$3 on either side of unchanged as prices were quite variable across the Prairies. Major feedlot operators were extremely aggressive for yearlings. Larger groups of one-cut cattle were very well bid.
April live cattle futures made fresh contract highs and closed last week at $141.35. This set the tone for heavier replacements. The quality of cattle coming on the market was excellent, which enhanced overall buying enthusiasm. Ranchers have been active sellers with the yearling market at 52-week highs. Feedlots in Alberta focused on local cattle; Manitoba values were at a $3-$5 discount to central Alberta; Saskatchewan prices were a $1-$4 discount to the Alberta average.
South of Edmonton, larger-frame mixed steers averaging 925 lbs. straight off grass with full health program dropped the gavel at $187; a larger string of tan mixed heifers with similar characteristics averaging 915 lbs. were reported at $175. In the Lethbridge area; larger-frame Angus-blended steers averaging 855 lbs. straight off grass were quoted at $197; medium-frame Hereford-blended steers off pasture weighing 812 lbs. were valued at $202 landed in the feedlot. Just west of Lethbridge, a larger group of tan heifers averaging 818 pounds dropped the gavel at $182.
The calf market was hard to define. In southern Manitoba, Simmental mixed steers weighing a shade under 600 lbs. were valued at $219 and similar-quality heifers averaging 630 lbs. were reported at $190. In central Alberta, larger-frame weaned mixed steers averaging 630 lbs. were quoted at $211. In central Saskatchewan, a larger group of mixed semi-weaned steers averaging 520 lbs. were reported at $230 and tan weaned heifers weighing 650 lbs. were quoted at $187.
The harvest is in the early stages; I’m forecasting the Canadian barley crop to finish in the range of 6.8 million to 7.2 million tonnes, down from the 2020 crop size of 10.7 million tonnes. Western Canada will have to import three to four million tonnes of U.S. corn to satisfy feed demand. At this time, it appears the calf market has incorporated a risk discount due to the uncertainty in feed grain prices over the winter.
— 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 or via his website at ResilCapital.com.