Canfax Weekly Article | Report for the week of August 11

Alberta fed prices continue to strengthen, which is uncommon for the summer months. Despite historically strong prices, Alberta fed prices were at a sizeable discount to both the U.S. and Ontario markets. Alberta fed prices were trading at around $35.00-$38.00/cwt discount against the Nebraska market, the weakest basis since 2005. Dressed sales were reported from $500.00-$505.00/cwt delivered. Buying interest was noted from all Western Canadian packers. Cattle that traded were scheduled for delivery anywhere from late August to the second half of September delivery. It is important to highlight how uncommon it is to see fed prices near record highs in August, as over the past 50 years, there has only been one time when annual highs occurred in August.

Last week, Alberta auction volumes were 15,985 head, 8 per cent lower than last year. For the month of July, volumes were 71,733 head, 18 per cent higher than last year and 27 per cent above the five-year average. The feeder market was mixed last week, Canfax average feeder steers closed the week steady, while heifers were up $13.00/cwt. Heifers drew strong interest across all weight classes with the largest gain from 5-600 lbs, averaging $519.00/cwt, up $28.00/cwt from the previous week. This strength may have been fuelled by both cow-calf producers looking for replacement heifers as improved moisture conditions and general feedlot demand.

Last week, the non-fed market was mixed as Alberta D2 and D3 cows averaged $216.00/cwt and $199.00/cwt respectively, steady with the previous week. Feeder cows traded $11.00/cwt stronger and rail grade cows were up $5.00-$10.00/cwt. Butcher bulls were $4.00/cwt softer. As of July 29th, surface soil moisture conditions were rated good, excellent or excessive for approximately 61 per cent of Alberta compared toe the five-year average of 60 per cent. Moisture conditions were the highest in Central and Southern Alberta.

Bull

• Alberta 550 pounds heifer put in a new record high
• Fed market is putting in record highs in August, first time since 2008
• Canadian retail beef demand has stayed resilient

Bear

• The nearby live and feeder cattle contract as of August 8th is trading $6.20/cwt and $9.25/cwt softer after five days of consecutive rally
• Alberta fed prices are trading at a sizeable discount against the Nebraska market
• Canadian heifer carcass weights are running above last year and the five-year average