Western Canadian feeder cattle prices were steady to $3 per hundredweight (cwt) lower in comparison to seven days earlier, depending on the weight category.
Alberta packers were buying slaughter steers in the range of $118-$122/cwt and this volatility resulted in softer bids for heavier replacements. Favourable pasture and forage conditions underpinned the market for feeders under 600 pounds and stronger demand was noted for replacement heifers and cow-calf pairs.
The anticipation for larger feedgrain supplies in the fall period has rejuvenated buying interest for herd expansion amongst cow-calf producers. Overall, auction market volumes were quite low, in line with the seasonal tendency. U.S. feedlot buying interest was noted in Manitoba and eastern Saskatchewan, as feeder cattle prices in the U.S. northern Plains advancing $2-$3/cwt on average.
There were no real features to report this week. Small groups of cattle moved through the auction rings and were discounted on minor attractive features. This is the time of year where it takes two or three weeks to make an even feeding pen of 200 head. Feedlot operators are content and cautious, given the adverse margins over the winter. Feeder cattle weighing 700-800 lbs. are $20/cwt lower than last year at this time, and with current feedgrain prices near historical highs, there is no incentive to increase buying ideas.
There were no major surprises in Thursday’s June U.S. Department of Agriculture report. U.S. second-quarter beef production will finish approximately 200 million lbs. above last year, which limits the upside in wholesale beef prices, fed and feeder cattle values in the short term.
The feedgrains complex is bound to experience severe volatility in July during the corn pollination period. Secondly, the U.S. corn harvest will be about two to three weeks later than last year, with the bulk of harvest supplies coming on the market in October. Feeder cattle prices will start to percolate higher when the industry is comfortable with new-crop barley and corn production. This may only occur in mid-August or early September.
— Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at [email protected] for questions or comments.