Weaker feed grain values, along with stronger fed cattle prices, caused Western Canadian feeder cattle prices to trade steady to $2 per hundredweight (cwt) higher. The market was relatively undefined given the lack of volume.
Some producers were holding back smaller groups or “underdeveloped stragglers” as gambling stocks, but these supplies have also moved through the market by this time.
In a typical year, the fed cattle market softens during the summer months but the cash live cattle is behaving in a counter-seasonal manner, reinforcing ideas that this tight supply situation and rationing of demand has not fully materialized. Recent economic data reflected a surge in consumer spending and rising credit card debt, which to the cattleman signals “short-term restaurant expenses.” More people working, growing consumer confidence and rising income levels will continue to drive all meat prices through the summer.
Favourable pasture conditions across the Prairies have many producers looking to expand herds. However, cow-calf pairs in the range of $3,000 to $3,600 have producers thinking on both sides of the fence. Canadian cattle producers looked south of the border for market sentiment and U.S. feeder prices were quoted $3-$5/cwt higher. The U.S. Department of Agriculture reported 800-pound steers broke the magical $200/cwt level on very strong buying interest.
Feedlot managers breathed a sigh of relief last week as barley traded at $195 per tonne delivered Lethbridge. This is down $20 per tonne from earlier in May, when seeding was in full force. Truck availability has improved so stocks in Manitoba and eastern Saskatchewan can move to the “barley-drained” regions of Alberta. Alberta packers were buying fed cattle in the range of $146-$152/cwt last week. Wholesale beef prices remain strong, which should support the fed market throughout June.
Western Canadian prices for 800- to 900-lb. steers were quoted in the range of $190-$205/cwt last week; 700- to 800-lb. cattle was quoted from $190 to $208/cwt. This past week, abnormal strength was noted in the lighter categories after stagnating earlier in spring. Calves from 500 to 600 lbs. were quoted at $220-$245/cwt in eastern Saskatchewan and Manitoba, largely due to strength in the U.S. market.
— 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.