For the week ending August 17, Western Canadian feeder cattle prices were $3-$5 lower on average. Three weeks ago, 1,000 pound steers off grass reached up to $340/cwt. This past week, these same cattle were quoted in the range of $315-$325/cwt.
The steam has come off the market as the February live cattle futures are about $10 off the July highs. Buyers are being patient to step on yearling ownership given the uncertainty in the fed market. Grass conditions are favorable in most regions of the Prairies. Secondly, we’re seeing more cattle come on the market with many auction barns holding feature sales over the next couple of weeks. A large volume of yearlings off grass will be available in September.
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In Central Alberta, larger frame, mixed steers off grass, averaging 978 lbs, with full processing data sold for $327/cwt. At the same sale, medium to larger frame mixed steers, weighing just over 900 pounds, reached up to $349. East of Calgary, larger frame, black Limousin heifers straight off pasture, around 1,025 pounds, were valued at $300/cwt fob ranch. East of Edmonton, larger frame exotic heifers off grass, scaled at 912 pounds, were quoted at $324/cwt. Backgrounded cattle on light grain ration are trading for a $12-18/cwt discount off values mentioned above.
South of Edmonton, mixed steers off grass, with full health data, on the card at 840 pounds, apparently sold for $364/cwt. East of Edmonton, Simmental blended steers straight off the ranch, averaging 768 pounds, were quoted at $369/cwt. Northwest of Calgary, Angus-based heifers hovering at 740 pounds off pasture were quoted at $350. In Southern Alberta, a pen-sized package of black steers around 700 pounds supposedly tapped out at $400/cwt. In the Calgary region, steer calves weighing 500-525 pounds were quoted in the range of $500-$515 and heifers of similar weight were valued at $425-$440/cwt.
The calf market will become more defined over the next few weeks.
The unemployment rate is rising on both sides of the border. The next U.S. jobs report will be released on September 6. If the data is disappointing, there will be a repeat of August 2 but on a larger scale. Live cattle futures could be down limit two days in a row. This fear is resulting in a defensive tone for the feeder market.
— 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.
