For the week ending August 3, Western Canadian feeder cattle prices were relatively unchanged from seven days earlier. Strong buying interest continued on yearlings straight off grass; however, the “just get’em” type orders that were evident a week earlier now had limits. More cattle will come available in August and buyers are being more patient to see how the market develops.
There were some mid-grade yearlings that sold $10/cwt off the peak levels from the top cut cattle the previous week. On Thursday and Friday, the sell-off in the live and feeder cattle futures resulted in defensive tone. Alberta packers were buying fed cattle on a dressed basis at $430/cwt delivered, up $2/cwt from last week which was supportive to the overall feeder complex. Many auction barns are hosting feature yearling sales next week and this will provide a better idea of the price structure. Calf numbers were limited resulting in a wide range of values.
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North of Saskatoon, mixed steers weighing 1,000 pounds off grass sold for $329/cwt. South of Edmonton, mixed steers off grass weighing around 890 pounds off grass reportedly sold for $355/cwt. In central Alberta, a smaller group of mixed steers off grass averaging 820 pounds supposedly traded for $376/cwt. In the same region, a larger package of tan mixed heifers off grass around 835 pounds were last bid at $342/cwt.
In southern Alberta, mixed steers weighing just over 700 pounds off grass were last bid at $400/cwt. South of Edmonton, mixed heifers straight off pasture averaging 720 pounds were quoted at $388/cwt.
In central Alberta, a smaller group of black steers weighing 656 pounds were quoted at $423/cwt. In central Saskatchewan, a handful of mixed, weaned steers weighing just over 600 pounds were quoted at $435/cwt.
In southern Alberta, a small group of mixed steers scaled at 520 pounds were valued at $460/cwt. In central Saskatchewan, a little package of black heifers weighing 500 pounds were quoted at $405/cwt. Details of these smaller groups were not noted but buyers were picking away to acquire larger volumes.
The futures markets can be unpredictable with larger traders or hedge funds basing buying or selling decisions on other factors than the local cattle producers or feedlot operators. This can cause local cash markets to divorce from the futures markets resulting in significant fluctuations to the basis.
— 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.
