Canfax Weekly Article | Report for the week of April 24, 2023

With fed prices moving above $220/cwt, feedlot margins have gone from negative to positive, and lift times have tightened considerably. From a supply perspective, the market is currently in the process of working through what could be the tightest market-ready numbers that we could see all year. Yearling supplies are winding down, while fed calf numbers continue to be light. This week, dressed sales were reported at mostly $380/cwt delivered, $5-7/cwt higher than the previous week. For cattle sold on the cash market, it is estimated feedlot margins are anywhere from $150-250/head positive.

Feeder prices rallied sharply higher last week, with continued strong interest for grass-type calves and for 700+ lb bunk replacements to hit the fourth-quarter fed market. Steer calves from 5-700 lb and 6-700 lb heifers all established new historic highs. A light test of Saskatchewan steer calves for deferred September/October delivery saw a slight premium, while large AB/SK steers over 900 lb saw a significant $22.50/cwt premium to the spot price. Total auction volumes realigned 95% larger than the previous week, which included the Good Friday holiday, to 28,126 head. YTD auction volumes were up 3%, totaling 431,017 head. Canadian feeder exports to the U.S. for the week ending April 8 totaled 2,644 head and were 52% lower than year ago. YTD feeder exports continue significantly below year ago, down 61% at 33,910 head.

Non-fed prices rallied higher on reduced offerings, and D2 slaughter cows surged almost $9.50/cwt higher than the previous week to average $139.86/cwt. D3 cows saw a respectable $5.80/cwt week-over-week price improvement closing at $121.71/cwt. Average D2 cow/AB steer price spread continue to seasonally narrow at 61.5%. Butcher bull prices firmed modestly $3.34/cwt higher to average $155.79/cwt. Western Canadian non-fed slaughter for the week ending April 15 was 23% larger than the previous week at 6,493 head, and YTD was up 13% to 122,092 head.

Bull:

• Feedlots should continue to maintain leverage moving forward.
• Carcass weights continue to ease seasonally smaller.
• Improved feeding margins are in the black.

Bear:

• Competing meats have better margins and features than beef at retail.
• USDA’s April 1 cattle on feed report is being viewed as slightly bearish, with placements above expectations.
• The fed basis remains seasonally weak.