Klassen: Weather, COVID, feed grains pressure feeder market

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Compared to last week, western Canadian yearling prices were $2-$4 lower on average; calves traded $2 to as much as $6 below week-ago levels.

Southern Alberta received its first snowfall of the season last week, which hindered demand for fresh replacements. Feedlots always incorporate a risk discount when the first snowfall of the year materializes, especially in the lighter weight categories. This year was no exception. Weaned or semi-weaned vaccinated calves held up better than bawlers just off their moms; however, Alberta feedlots also focused on local cattle. Transporting feeders long distances enhanced probabilities of contacting shipping fever in the current environment. Calf prices in Manitoba appeared to hold value as the eastern Prairies escaped the early snowfall. Earlier in October, there was strong demand for feather light calves under 500 lbs. In southern Alberta, these feather-light bawlers were hot, but outside the major feedlot areas, demand seemed to falter. The market was very soft for feeders weighing in the range of 500-650 lbs. because these cattle will be ready next summer when fed cattle supplies will be rather burdensome.

In east-central Alberta, medium-frame mixed red steers just off grass weighing 950 lbs. were valued at $178. In central Alberta, larger-frame minimal-flesh Simmental-based, vaccinated age-verified steers averaging 850 lbs. were quoted at $187 and similar-quality mixed heifers weighing just over 850 lbs. were reported at $173. In central Saskatchewan, Charolais-based steers weighing 810 lbs. were quoted at $198 but in northern Manitoba, red medium-frame steers averaging 825 lbs. were valued at $190.

In central Alberta, vaccinated age-verified mixed steer calves just off their mothers averaging 510 lbs. were quoted at $205 and similar-quality steers weighing 600 lbs. were valued at $197. In southern Alberta, age-verified vaccinated Angus-blended heifers weighing 575 lbs. were valued at $176. In Manitoba, Simmental steers weighing 530 lbs. were reported at $228 and Charolais heifers weighing 570 lbs. sold for $188. In southern Alberta, lightweight steers averaging 300-400 lbs. were quoted in the range of $280-$315; however, in central Alberta, mixed steers weighing 390 lbs. were valued at $258.

Barley and corn prices continue to percolate higher and many feedlot operators have been caught off guard by the higher input costs. Fed cattle prices softened last week. Rising COVID-19 cases on both sides of the border resulted in softer wholesale prices. The feeder market is struggling for the time being with all the negative variables weighing on the market.

— 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.

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