Compared to last week, western Canadian yearling markets traded $3-$5 higher while calf prices advanced $1-$3 on average. Alberta packers were buying fed cattle on a dressed basis of $360/cwt last week, up $3-$10 from a week earlier. Using a 60 per cent grading, live prices would be equivalent to $216.
Feeding margins have improved over the past couple of weeks, which has rejuvenated buying interest for replacements. Secondly, June and August live cattle futures made fresh contract highs last week which spurred on demand for yearlings. Fed cattle basis levels appear to be quite strong for May and June as fed cattle supplies are expected to be relatively snug this spring. The western Canadian feeder market appears to be trading at a premium to values south of the border. Given the tight feeder supplies, the western Canadian feeder market is functioning to curb export movement. Available supplies of backgrounded cattle appear to be significantly lower than last year, which may indicate that the 2022 calf crop was overstated.
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South of Edmonton, larger-frame medium- to lower-flesh mixed steers on light barley diet with full health records just over 900 lbs. sold for $$255. In the same region, medium- to larger-frame red Simmental light-butter-carrying heifers averaging 860 lbs. were valued at $235. In southern Alberta, larger-frame Charolais steers with low to medium flesh averaging 870 lbs. were valued at $259 and Angus-based heifers just over 800 lbs. with thinner frames chalked the board at $233. Corn is trading at $315/tonne in southern Ontario and $425/tonne in southern Alberta.
Northwest of Winnipeg, tan steers weighing 736 lbs. with lower flesh levels reportedly sold for $307. East of Saskatoon, larger-frame Simmental mixed steers with medium flesh levels weighing just over 700 lbs. were valued at $293. In the Red Deer area, Charolais-blended steers with medium flesh averaging 725 lbs. were notched the board at $288. Quality heifers in the range of 700-750 lbs. were an $18-$22 discount to steers in most cases.
The market was even across the Prairies in the lighter weight categories. Southeast of Calgary, larger-frame red mixed, short-weaned steers weighing 610 lbs. were valued at $321 and similar quality heifers weighing 600 lbs. were quoted at $295. In southwestern Saskatchewan, medium-frame black mixed steers weighing 630 lbs. silenced the crowd at $306. In Manitoba, larger-frame black steers weighing 625 lbs. were bid up to $310.
In southern Manitoba, Angus-blended steers averaging 570 lbs. were quoted at $328. In southern Alberta, mixed semi-weaned steers weighing 520 lbs. reportedly sold for $345 and mixed heifers averaging 515 lbs. were purchased for $295. The adverse weather forecast may have influenced the market for lighter calves.
U.S. farmers are expected to plant 92 million acres of corn this spring, up 3.42 million acres from last year. The Canadian grain trade is anticipating a year-over-year increase in Canadian barley acres. It’s going to be a late spring, which may increase feed wheat supplies in Western Canada. This feed grain environment is supportive for the lighter weight categories.
— 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.
