Compared to last week, western Canadian feeder cattle markets traded $2-$5 lower on average; calves under 650 lbs. appeared to trade $3-$8 lower with significant pressure on the weight category between 550 and 650 lbs. Moderate demand surfaced on quality yearlings but major operations appeared to back away from the cattle in the heavier weight categories.
The calf market was quite variable across the Prairies, with limited slippage in Manitoba. We’re seeing more calves come on stream in Alberta, where 40 per cent of the feeder cattle are located.
It’s not uncommon to see Alberta prices trade at a minor discount at this time of year. Feedlot inventories are 17 per cent above the five-year average and pen space is once again becoming an issue. The adverse weather resulted in minor premiums for semi-weaned and weaned calves on some type of health program. Those bawlers coming direct off their mothers were a hard sell. Margins are under water on unhedged cattle and it’s very difficult for the cattle feeder placing cattle in a custom lot. Buyers want these calves a bit cheaper to average out previous purchases.
In central Alberta, a small group of mixed steers weighing 923 lbs. were valued at $165 while tan heifers weighing just over 950 lbs. were quoted at $154. In southern Alberta, larger-frame medium-flesh Angus-blended steers weighing 820 lbs. were quoted at $183 and similar quality heifers averaging 850 lbs. were reported at $159. In central Alberta, black mixed vaccinated age-verified steers with lower flesh weighing just over 800 lbs. were quoted at $182.
In Manitoba, medium- to larger-frame black steers weighing 725 lbs. were quoted at $179 and Charolais-based steers weighing 780 lbs. were reported at $185. In east-central Saskatchewan, mixed larger-frame red steers weighing 720 lbs. were reported at $187.
In southern Alberta, a larger group of semi-weaned Charolais vaccinated age-verified steers weighing 610 lbs. were reported at $192 and similar quality heifers were reported at $179. In Manitoba, a smaller group of red steers averaging 500 lbs. were reported at $215; east of Saskatoon, Angus-based steers just off their mothers averaging 515 lbs. were quoted at $212.
There was still good demand for featherlight calves that will be available for grass next spring. In central Alberta, a small group of silver steers weighing 400 lbs. were reported at $255.
Feeder cattle futures appeared to recover last week with the weaker corn futures; however, there was a widespread selloff in most commodity and financial markets, with all sectors of the economy taking a “risk-off” attitude heading into the U.S. election. COVID-19 cases in Canada and the U.S. continue to rise, which also contributed to the softer tone. Many states and provinces are implementing constraints on restaurants and the size of gatherings in public or at home. Demand uncertainty will continue to weigh on the feeder market in the short term.
— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and 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.