Following nineteen straight weeks of higher fed cattle prices, the market eased modestly. The Canfax average fed steer and heifer price ended the week around $343 per hundredweight live, down $1 from the previous week. Marketings were supported by a balanced mix of fed calves and yearlings, with no price advantage for either class. Buying interest came from all Western Canadian packers, and dressed sales were reported at $572 to $578 per hundredweight, FOB the feedlot. Delivery timing varied widely by packer, and some sellers negotiated longer pick-up windows. Traded cattle were scheduled for pickup anywhere from one to six weeks.
Feeder cattle prices also finished the week mostly steady to $1 per hundredweight lower. The sharpest decline was seen in lightweight calves weighing 300 to 400 pounds, where prices fell by more than $20 per hundredweight. In contrast, steers weighing 800 to 900 pounds climbed $10 per hundredweight and set new record highs. Overall, feeder prices are trading about $100 per hundredweight above year-ago levels. Demand for young cow-calf pairs remains exceptionally strong, with record prices still being paid. In electronic trading this week, first- and second-calf pairs with good calves at side sold from $7,975 to $8,900 per pair. Alberta auction volumes totaled just over 15,000 head, about 3,000 head fewer than last year. Canadian feeder cattle exports to the United States for the week ending May 9 reached 1,914 head.
Cull cow markets were firm as well. Alberta D2 cows traded $1 per hundredweight higher, averaging $252, with a range from $225 to $290. D3 cows averaged $225 per hundredweight. Western Canadian cow slaughter year to date is running 10% below last year. Butcher bulls gained $6.50 per hundredweight, averaging $280 and trading in a range from $229 to $322. Canadian slaughter bull exports to the United States for the week ending May 9 totaled 546 head.
Supportive factors remain in place for the fed cattle market. U.S. drop credit values are 33% higher than a year ago, which improves packer returns. In eight of the past fifteen years, Western Canadian fed cattle prices posted their first-half highs in June, suggesting seasonal strength could continue. At least one Western Canadian packer is reportedly short bought and moving cattle quickly, adding urgency to nearby procurement.
At the same time, several bearish influences are weighing on sentiment. The latest cattle on feed report was seen as negative because feedlot placements came in above industry expectations. In addition, the Cargill plant in Fort Morgan locked out more than 1,700 union workers after union members rejected the company’s latest offer. Over the past two trading sessions, feeder cattle futures have also dropped $15 per hundredweight, adding pressure to the broader market outlook.
