For the week ending July 27, Western Canadian prices for yearlings off grass were $10-$15/cwt higher compared to seven days earlier.
The market for backgrounded yearlings traded $2/cwt to as much as $8/cwt above week-ago levels, while calf markets were up $3-$6/cwt from earlier in July. The demand for yearlings at this time of year is inelastic. Buyers purchase cattle regardless of the price.
The year-over-year decline in last year’s calf crop has caused the market to set new records. Larger finishing feedlots are setting the price structure as many of these lots have seasonal low inventory. The quality of yearlings coming off grass is excellent with buyers shopping for feed efficiencies.
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The heifer-steer spread appeared to narrow last week on 850-pound-plus replacements. Strength in the yearlings pulled up the lighter weight categories. Operations that backed away from grass cattle quickly secured ownership of dry-lot backgrounders. Small strings of off-grade cattle became very attractive after the market for premium feeders was established.
Southeast of Edmonton, mixed steers off grass weighing 1075 pounds reportedly traded for $310/cwt. In southeast Saskatchewan, larger pen-sized packages of 1,000-pound steers off grass traded in the range of $338-$339/cwt. In central Alberta, black heifers straight off pasture, averaging 865 pounds dropped the gavel at $334/cwt. East of Edmonton, Angus blended heifers straight of grass, averaging 800 pounds, with full processing records silenced the crowd at $349.
In southern Alberta, tan steers from pasture weighing 810 pounds were valued at $378/cwt and mixed steers averaging 860 pounds were quoted at $360/cwt. A smaller package of background Angus blended steers with full processing data, on light grain and silage diet, weighing 915 pounds were quoted at $310/cwt south of Edmonton.
In ecntral Saskatchewan, backgrounded tan heifers averaging 720 pounds were valued at $370/cwt fob backgrounding lot. North of Calgary, backgrounded black Limousin blended steers scaled at 730 pounds were quoted at $410/cwt. In central Alberta, mixed weaned steers averaging 650 pounds, with full processing records, apparently traded for $405/cwt.
In southern Alberta, mixed weaned steers from pasture, averaging 530 pounds supposedly sold for $490/cwt. In Central Alberta, a handful of black mixed heifers off grass, weighing 558 pounds reportedly moved at $390/cwt. The calf market was hard to define due to limited numbers.
The Commitment of Traders Report reflects that there could be minor rally coming in the live cattle futures. The Canadian dollar is poised to weaken. The potential for stronger live cattle futures and a weaker exchange rate may be contributing to the firmer tone for yearlings.
— 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.
