After previously acquiring very few cash cattle, front end packer supplies have started to tighten. Light trade the previous week resulted in large carryover volumes being added to last week’s showlist. Moderate trade was reported by Wednesday afternoon with dressed sales steady to $2.00 higher than the previous week. The Canfax average steer and heifer prices last were $108.00-108.50/cwt. Weighted average prices are now $10.00/cwt higher than the same week last year. The strengthening Canadian dollar and a narrow Alberta/Nebraska cash to cash basis ultimately slowed US packer inquires. Moderate carryover volumes will be added to the next week’s showlist. The Alberta fed cash to futures basis strengthened 0.63 to close the week at -11.18. USDA reported Canadian fed cattle exports to the US for the week ending July 14th totaled 5,708, up 49% from the previous week.
Although the corn futures consolidated around $8/bu, and feeder cattle futures consolidated around $135/cwt last week, local feeder prices were still under significant pressure. With Canfax feeder steer and heifer prices down $6.70 and $5.00/cwt respectively on light volumes, some buyers and sellers are taking a wait and see approach to the current market developments. The 7,330 head that went to auction last week were 22% smaller than a week ago, 14% smaller than a year ago, and 48% smaller than the 5 year average, showing just how tight supplies are. Feeder exports have also shrunk significantly from previous weeks. For the second week in a row, feeder cattle exports are well below a year ago after being significantly higher through the first half of the year. Canadian feeder exports to the US for the week ending July 14th were 1,012 head.
Local packer interest remained composed on this week’s moderate offering of non-fed cattle. Both live and rail prices were basically steady for cull cows. D1/D2 cows averaged $78/cwt and ranged from $73-83/cwt. Butcher bulls were under moderate pressure, losing over $2/cwt from a week ago. Non-fed exports to the US for the week ending July 14th were 4,356 head, down 9% from the previous week.
• Market ready supplies should tighten heading into August
• Lower cutout prices should be supportive to beef movement
• Cash barley bids have started to show some relief for feeders
• Basis remains weak
• Carcass weights remain significantly higher than a year ago
• The Canadian dollar has been on a strengthening trend
For more detailed information on markets this week please visit the Canfax website www.canfax.ca.