Compared to last week, western Canadian feeder markets were down $2-$4 on average. Prices for feeder cattle in the eastern Prairie regions were relatively unchanged from seven days earlier; however, values in Alberta and western Saskatchewan were down $4 to as much as $8 in some cases. This variation made the market hard to define. Strength in the U.S. feeder market supported prices in Manitoba and eastern Saskatchewan. The Canadian dollar was under severe pressure enhancing demand from south of the border in these regions. Alberta buyers were on the sidelines this past week due to limited pen space.
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There is no year-end buying evident this year. Feeding margins have been struggling and there was a significant risk-off sentiment. The new South African COVID-19 variant known as B.1.1. 529 caused a major sell-off in financial and energy markets. Feedlots were concerned over long-term beef demand although live and feeder cattle futures held value on Friday.
In Manitoba, black steers weighing 840 lbs. were valued at $189 and Simmental mixed steers weighing 800 lbs. were quoted at $190. In central Alberta, late-blooming Charolais-blended steer calves averaging 812 lbs. were quoted at $176. South of Edmonton, mixed heifers straight off grass with full health records averaging 970 lbs. were quoted at $174.
In central Saskatchewan, mixed medium-frame short-weaned steers weighing just over 700 lbs. dropped the gavel at $185. In Manitoba, medium- to larger-frame black steers weighing 750 lbs. were quoted at $192; Limo-blended unweaned 630-lb. steers were valued at $204. In southern Alberta, Charolais-based unweaned steers weighing 630 lbs. were quoted at $193 landed in the feedlot.
In southern Alberta, red and white-faced steers fresh off their mothers weighing 525 lbs. were reported at $198 and similar-quality heifers weighing 500 lbs. were valued at $179. North of Calgary, mixed steers weighing just over 400 lbs. were quoted at $240 and feather-light mixed heifers averaging 350 lbs. were reported at $206.
The feeder market is in the process of making seasonal lows. U.S. fed cattle prices in the southern Plains reached up to US$140 on a live basis, up US$10 from 14 days earlier. Canadian exports of fed and feeder cattle are expected to surge over the next few weeks. Alberta packer bids have been surfacing $10-$12 below U.S. values; however, the U.S. and Canadian fed cattle markets should trade at equilibrium during January. Finishing feedlots will liquidate larger volumes in the first quarter of 2022 and be anxious to reload.
— 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.
