For the week ending July 19, Western Canadian feeder cattle markets were unchanged from the previous week, although volumes were limited.
Calves under 550 pounds were extremely variable after jumping sharply the previous week. Noted demand surfaced from Ontario where packer direct sales for Grade A steers reached $530/cwt on a dressed basis. Using a 60 per cent grading this equates to a live price of $318/cwt.
Alberta packers were buying fed cattle at $297.50/cwt fob feedlot in southern Alberta, relatively unchanged from the previous week. Last week, Ontario corn was quoted at $5.75/bu while barley in Lethbridge area was trading at $6.50-$6.75/bu delivered. Feedlot margins remain healthy as fall placed calves come on the market in larger numbers. There is a fair amount of empty pen space. Demand for feeders is at a seasonal high.
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Grass yearling sales are set to start next week at many auction barns in Western Canada. This will define the price structure for the fall period. There are pockets of Saskatchewan and Alberta where pastures have deteriorated due to limited rainfall resulting in earlier than normal sales.
In Southern Alberta, a pen of medium to larger frame, lower flesh, 1,000-pound mixed steers on silage and supplement ration with full processing records were valued at $398/cwt fob feedlot. At the same feedlot, a pen of 950-pound mixed heifers on the same diet with full health records were quoted at $385/cwt fob feedlot.
In Central Alberta, smaller groups of 800-825 pound mixed steers with medium flesh levels (light grain and silage diet) and unknown processing were quoted from $450/cwt to $465/cwt. The Westlock market report had a smaller package of black heifers off grass averaging 855 pounds with limited processing trading for $420/cwt.
The Ponoka market report (video sale) had a larger group of tan steers with a base of 620 pounds off grass, minerals and cows with full processing data selling for $610/cwt fob feedlot in east-central Alberta for late October delivery. At the same sale, a package of 200 tan heifers with a base weight of 590 pounds off grass, mineral and cows with full preconditioning sold for $566/cwt for October delivery.
Auction markets reported limited volumes with many barns selling 150-250 head. The market was hard to define and not representative of prices that will be evident next month. Small groups of steers of various quality averaging 500-525 pounds were quoted from $600-620/cwt. The prior week, larger steer calf packages for November delivery coming off grass of similar weight were selling for $670/cwt to as high as $699/cwt.
Analysts are forecasting a U.S. corn crop of 410 million tonnes, up from last year’s output of 378 million tonnes. U.S. corn will trade into Alberta, possibly as far north as Edmonton and displace barley. This will take about 20-30 cents off the cost-per-pound gain. Lower feed grain prices this fall will enhance the price of feeder cattle by $20-$25/cwt.
