Western Canadian feeder cattle were $2 to $3 higher on average in comparison to week-ago levels. Steers weighing just over 900 pounds brought back $106 in central Alberta while similar prices were Manitoba and Saskatchewan. Buying interest for calves was also strong, with 6-weight steers selling for over $125 in southern Alberta.
Managers in Feedlot Alley remain optimistic going forward, despite a softer tone in the live cattle futures and a stronger Canadian dollar. Barley prices remain under pressure and the Alberta feedlot operator has been spared from the fireworks in the U.S. corn market.
The delayed marketing pace by the Canadian cow-calf producer has resulted in tighter available supplies in the short term. However, it also appears feeder cattle exports are less of an influence on the overall market structure, given the significant contraction in the Canadian cattle herd since 2005.
U.S. feeder values were steady to $2 lower on average, with a slight recovery noted late in the week. The U.S. cow slaughter continues to come in larger than anticipated, which will result in a smaller calf crop in 2010 and 2011. We are not seeing significant heifers held back for herd maintenance, and U.S. feedlot placements have been larger than expected. This should result in tighter U.S. feeder cattle supplies next spring, at which time we should see greater U.S. demand for Canadian feeder cattle.
— 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] or 204-287-8268 for questions or comments.
The material contained herein is for information purposes only and is not to be construed as an offer for the sale or purchase of securities, options and/or futures or futures options contracts. While the information in this publication cannot be guaranteed, it was obtained from sources believed to be reliable. The risk of loss in futures trading can be substantial. The article is an opinion only and may not be accurate about market direction in the future. Do not use this information to make buying or selling decision because adverse consequences may occur. This information may be wrong and may not be correct about current market conditions in all areas of Canada. This is an opinion only and not based on verified facts.