Compared to last week, Western Canadian yearling markets traded $2-$5/cwt higher on average while calves were up $5/cwt to as much as $10/cwt in some cases.
Feather light calves under 500 pounds reached fresh historical highs with 300-400 pound steers trading from $400-$450/cwt in Southern Alberta. Finishing feedlots continue to be aggressive on yearlings for nearby and fall delivery with 1,000 pound steers touching $300/cwt. Fed cattle basis levels remain firm for the winter of 2023/24 and the February and April live cattle futures continue to trade near historical highs.
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Feedlot operators shrugged off the rally in the corn market this past week. Imported U.S. corn delivered to Southern Alberta feedlots continues to trade at a sharp discount to domestic barley for old- and new-crop positions. Feeding margins are extremely tight moving forward but renewed optimism that this rally in the beef complex is not over.
In Central Alberta, larger frame mixed steers fresh off grass with full health data averaging 1,000 pounds sold for $298. In the same region, Simmental blended heifers off grass with full processing records with a scale weight of 970 pounds reportedly traded at $272. North of Saskatoon, larger frame mixed steers off pasture weighing 1020 pounds set the bar at $302 fob farm for September delivery.
In Southern Alberta, Angus based steers off grass weighing 925 pounds were valued at $315 fob farm. In the same region, larger frame Simmental mixed steer on pasture diet weighing 800 pounds charted course $323. South of Edmonton, Hereford blended steers weighing a shade under 700 pounds were last bid at $339 and a smaller group mixed red heifers weighing 750 pounds were quoted at $288.
In Central Alberta, fully weaned black steers off grass weighing 590 pounds silenced the crowed at $386 and weaned mixed heifers with a scale weight of 510 pounds top the market at $319.
Near Lethbridge, steers weighing 300-400 pounds were trading from $400 to as high as $446. Stragglers and small off grade groups were severely discounted. The market was hard to define on calves under 650 pounds due to limited volumes.
The USDA released their cattle inventory report and the 2023 calf crop was projected to finish at 33.8 million head, down approximately 675,000 head from the 2022 output. The U.S. cattle herd shows now sign of expansion with lower beef cow numbers and year-over-year decline in heifers for beef cow replacement. Ongoing job and wage growth in Canada and the U.S. continues to enhance consumer 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.
