Canada cattle report: Beef demand takes cattle futures higher in Canada

Cattle futures tracked higher as investors detected an improvement in beef demand, stimulating our local fed market. The Canfax weighted average steer price last week was $102.20/cwt, up $4.05/cwt and heifers traded $4.37/cwt higher to average $101.54/cwt. Showlist volumes trended fully steady with the previous week as market ready calves continue to be pulled forward. Almost all of last week’s offering was sold. Canadian fed exports to the US for the week ending June 11th totaled 5,990, up 16% from the previous week. As live cattle futures strengthened last week, the cash to futures basis widened $1.59 to wind up at -6.52. A light volume of feeder cattle last week at auction made it difficult to establish any meaningful price trends. Light stocker steers generally traded steady last week while middle weight steers trended slightly lower. Heavier steers targeting the fourth quarter fed market saw good demand and higher prices. Stocker heifers continued mostly steady and feeder heifers over 600 lbs generally traded $0.50-1.00/cwt higher. Last week’s small auction volume was 52% lower than the same week last year. Feeder exports to the US for the week ending June 11th, with the exception of holiday weeks, are near an all time record low at 659 head and YTD for the same period exports are down 63%. A significant offering of non-fed cattle was observed again last week at auction with D1,D2 cow prices mostly steady and D3 cows firming $0.54/cwt higher. Butcher bulls trended $0.30/cwt lower to range from $73.00-97.00/cwt.

Bull factors

• Fund money is once again parked in cattle futures.

• North American demand has seen short term improvement from July holiday weekends.

• Local fed supplies are moderate.

Bear factors

• High grain prices are impairing placements and profit margins.

• Seasonality trends heading into July and August would indicate lower prices.

• Western Canadian feedlot conditions are poor.

For more detailed information on markets this week please visit the Canfax website www.canfax.ca.

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