Buying interest subsides in feeder cattle market
For the week ending May 16, western Canadian feeder markets were steady to $6 higher on average compared to seven days earlier.
Heifers were relatively unchanged but steers were notably stronger, especially on replacements over 800 pounds.
The October and December 2025 live cattle futures are trading at a $7 discount to the nearby June contract, which has buyers on the defensive.
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The U.S. national live price average for barrows and gilts was $69.43 May 15 and $73.57 May 9.
At the same time, the August feeder cattle futures are near the $300 level, which is an historical high.
The feeder market is functioning to ration demand because margins in Canada and the U.S. on incoming replacements are deep in red ink.
Many feedlot operators in Alberta and Ontario have pulled in the reins on purchases over the past couple of weeks.
Pen-sized groups are hard to come by at this time of year and smaller packages are discounted off average levels by $5 to $10.
The market was quite variable across the Prairies.
Southeast of Edmonton, larger frame lower flesh backgrounded Charolais cross steers averaging slightly more than 900 pounds reportedly sold for $392.
In central Saskatchewan, Simmental cross heifers averaging 900 pounds were valued at $368 f.o.b. farm.
At the Westlock, Alta., sale, a smaller package of red white face steers averaging 718 lb. reportedly sold for $480.
In the Calgary region, black Limousin blended heifers with a mean weight of 700 lb. notched the board at $462.
At the Vermilion, Alta., sale, a larger package of exotic heifers weighing slightly more than 600 pounds sold for $536. In the same region, a smaller package of Charolais steers with a mean weight of 665 lb. traded for $512.
More interest has been surfacing for bred heifers and cow-calf pairs, and the market is fairly even across the Prairies. Cattle producers are selling 700 to 800 lb. heifers and then replacing with a cow-calf pair or quality bred heifer.
Good quality cow-calf pairs are selling in the range of $5,500-$6,500, and medium quality pairs are $4,000-$5,500. Bred cows and bred heifers are trading from $3,000-$5,000.
Cattle producers can sell their 800 lb. heifers for $400 per hundredweight ($3,200) and pick up a decent bred heifer for $4,500.
D1 and D2 cows are trading at $210-$235 per cwt., and young heiferettes are up to $300 per cwt.
Remember, any asset is worth the present value of its future earnings, and these bred heifers could jump another $1,000-$1,500 over the next few months.
Jerry Klassen is the president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. He can be reached at 204-504-8339 or via his website at resilcapital.com.
Source: producer.com