Canfax Weekly Article | Report for the week of October 10, 2022

For the beginning of October, both the cash-to-cash and cash-to-futures basis are the weakest since 2005. Weaker basis levels aside, the fed market did set a new record price high for the month of October. It is very uncommon to see annual highs in October as this has only happened three time over the past 30 years. Light trade was reported last week and dressed sales in AB/SK ranged from $300-304/cwt delivered. Cattle traded were scheduled for the 3rd and 4th week of November delivery. U.S. packer interest was noted, and a few cattle ended up being marketed south. Depending on freight and dressing percentage, cattle were working back to the low/mid $180’s/cwt FOB the lot. Cattle that traded to the U.S. would be picked up in two weeks.

Alberta feeder prices were pressured modestly lower last week as auction offerings trended seasonally larger. Small calves less than 500 lb traded generally $4-6/cwt lower than the previous week. Larger calves from 5-700 lb traded mixed with steers modestly lower, while lesser converting heifers slid $8/cwt lower. Larger feeder over 700 lb traded unevenly lower on deteriorating lot size and quality. Total Alberta auction volumes were 27% larger than the previous week at 47,678 head and were 5% smaller than the same week last year.

Non-fed prices traded steady to stronger last week. D2 slaughter cow prices were steady and D3 cows firmed $2.60/cwt higher. Dressed cow bids trended sideways from $202-207/cwt delivered. Butcher bull prices continue to test annual highs and traded fully steady the previous week at $132.64/cwt. Slaughter bull exports to the U.S. for the week ending September 24th were almost 16% larger than year ago at 1,309 head and YTD volume was 9% larger, totaling 30,580 head. Seasonally larger salvage cow offerings are anticipated as early as next week.

Bull.

• The weak fed cash basis should encourage U.S. buying interest again this week.
• Fed prices remain contra seasonally strong on continued good demand.
• The Loonie has settled in at around USD $0.73.

Bear.

• Steer carcass weights are historically larger.
• Market ready packer inventories are ample.
• Feed barley prices continue to rally higher.

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