Compared to last week, western Canadian yearling markets traded $2 higher to as much as $5 lower depending on the region. Mid-weight calves weighing 650-800 lbs. were relatively unchanged while lighter weight calves were steady to $3 higher on average.
June live cattle are off $9 from their mid-February highs while the December 2022 live cattle contract is only down about $2. This appears to be the main factor influencing the price structure for feeder cattle. Major feedlots in Alberta were showing limited interest on backgrounded cattle last week. Larger operations are holding a large number of market-ready fed cattle and this backlog will take some time to be alleviated. There was steady demand for grassers and lighter calves. Feeding margins look more favourable in the final quarter of 2022. Most of Western Canada has received average to above-average precipitation over the past 60 days, so pasture conditions look promising. If we look at Statistics Canada data along with feedlot placements, feeder cattle supplies outside finishing operations are down about 100,000 head from year-ago in Western Canada. Supplies are tighter for calves under 700 lbs.
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Yearlings in central Alberta were premium over other areas of Western Canada last week. South of Edmonton, tan mixed steers on light grain ration with health records weighing 980 lbs. were valued at $183; Angus-blended heifers with medium flesh on light grain ration with full vaccinations averaging a shade over 900 lbs. dropped the gavel at $162. Charolais mixed steers weighing 830 lbs. with medium butter on light grain and forage ration caused buyers to bid up to $195. In western Manitoba, Simmental-blended steers with medium to thicker flesh averaging 810 lbs. were quoted at $180 and similar quality heifers weighing 885 lbs. were valued at $153. Southeast of Calgary, black Limo mixed steers with lower flesh levels weighing 870 lbs. were $187.
North of Saskatoon, Angus-based steers weighing 600 lbs. were valued at $235 landed in the feedlot and similar-quality heifers weighing 600 lbs. were priced at $200. South of Calgary, tan steers weighing 550 lbs. were quoted at $245 and similar genetic heifers weighing 520 lbs. were purchased for $210. Northwest of Winnipeg, black steers weighing 625 lbs. sold for $225 and a larger group of beautiful red Simmental-based steers weighing 575 lbs. reportedly sold for $242.
Corn continues to percolate higher on the heels of export bans from Ukraine and Russia. Feedlot operators are booking their feed grains and then adjusting purchase prices for feeders accordingly. There is no speculative behaviour on the feeder market at this time. U.S. cash feeder prices are down about $6-$8 on average from two weeks ago.
— 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.
