March 30 — Compared to the previous week, western Canadian feeder cattle markets traded steady to $3 lower on average. Alberta packers were buying fed cattle on a dressed basis in the range of $245-$249 delivered, down from the average value of $250 seven days earlier. Deteriorating feeding margins set a negative tone for the feeder cattle complex. Demand for yearlings was lethargic especially in the 850-pound-plus categories. Some backgrounding operators looking to move cattle direct off farm received sharply lower bids this past week. Calves appeared to hold value in some regions but drier conditions across the Prairies continue to weigh on the market. The February 2022 live cattle futures climbed back to contract highs, which was minorly supportive for the lighter-weight categories. Yearling prices for fall delivery look very strong and finishing feedlots were once again fairly aggressive for calves under 600 lbs.
South of Edmonton, mixed steers on full health program with medium flesh levels weighing 900 lbs. were quoted at $170; however, in southern Alberta, larger-frame Angus-blended steers with limited grain intake weighing just over 900 lbs. were valued at $168. In central Saskatchewan, tan steers with thicker butter levels weighing 860 lbs. were valued at $175 and similar-quality heifers weighing 840 lbs. were quoted at $142. In Manitoba, lower-flesh black steers weighing just over 800 lbs. dropped the gavel at $187 and Charolais heifers weighing 785 lbs. were quoted at $170.
In central Alberta, tan steers on full health program coming off light grain ration weighing 775 lbs. reached up to $190 and similar-quality and -weight heifers were quoted at $173. Northwest of Winnipeg, Simmental-based steers weighing 600 lbs. were reported at $208 and 600-lb. black heifers were valued at $183. North of Calgary, larger-frame black steers weighing 500 lbs. were quoted at $241 and Charolais heifers of similar weight were valued at $213.
The fed cattle market has larger supplies to absorb in the short term. Feeding margins are expected to improve later in summer as fed cattle numbers drop below 2019. Beef demand is exceeding expectations with improving restaurant traffic and steady retail movement. While we may see a softer tone in the short term, yearlings are expected to trade at fresh 52-week highs later in summer. Some buyers have been waiting until Wednesday’s U.S. Department of Agriculture acreage report which will provide an idea of the feed grain price structure next fall.
— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.