For the week ending August 24, Western Canadian yearling prices were down $6-$12/cwt from seven days earlier. Calf markets traded $10-$12/cwt below week-ago levels. Larger numbers are coming on stream resulting in the softer tone.
Secondly, buyers are being more cautious with the August feeder cattle futures trading at a $10 premium to the November contract. The futures market is telling feedlot operators to wait. Feedlot margins have been hovering around break-even; however, current yearling prices to high relative to the deferred live cattle futures. Producers don’t want a repeat of last winter and the high risk tolerance that was evident in early August appears to have evaporated.
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The quality is excellent across the board with many pen-sized groups of large frame and low flesh cattle. There’s very little premium for genetic specialty and the steer/heifer spread has narrowed in Alberta.
Near Dawson Creek, Black Angus steers off grass, averaging 950 pounds, traded for $318/cwt. North of Edmonton, a larger group of Angus-blended steers, weighing 925 pounds, sold for $325/cwt fob ranch. Near Wetaskiwin, a larger group of Charolais-based heifers, weighing 940 pounds, dropped the gavel at $310/cwt fob ranch. Northwest of Winnipeg, Simmental-based heifers, averaging 924 pounds, passed through the ring at $290/cwt.
South of Edmonton, a smaller group of mixed steers off pasture, on the card at 845 pounds, were last bid at $340/cwt in the ring. Northwest of Winnipeg, Charolais heifers off grass, weighing 820 pounds, were valued at $311/cwt in the ring. Northeast of Calgary, a pen-sized group of Charolais cross steers, averaging 715 pounds, notched the board at $380/cwt fob ranch.
Near Dawson Creek, Simmental Angus-blended heifers around 625 pounds apparently sold for $328/cwt. Northeast of Red Deer, Black Angus-based steers at 630 pounds traded for $380/cwt fob the ranch.
In East-Central Alberta, a larger group of Limousin steers, averaging 500 pounds, reportedly sold for $530/cwt fob ranch. South of Edmonton, a pen-sized group of Black Angus heifers scaled at 500 pounds apparently traded for $392/cwt fob ranch. Near Dawson Creek, a smaller group of Angus steers, weighing 425 pounds, were last bid at $509.
Alberta and B.C. have experienced dryer conditions. We’ll see more cattle come on the market from Saskatchewan and Manitoba over the next few weeks.
The USDA Cattle On Feed Report was viewed as negative longer term due to the year-over-year increase in placements. If the September 6, Canadian and U.S. jobs reports shows negative growth in August, buyers will lower bids for feeder cattle in fear of waning beef demand.
— 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.
