Canfax Weekly Article | Report for the week of December 6, 2021

The excitement around the Western Canadian fed market pales in comparison to what has occurred in the U.S. with prices there gaining $13/cwt over the past five weeks and trading at the highest levels since September 2015. Alberta fed prices are estimated at a $16/cwt discount to the Nebraska market, the weakest basis seen this year. Last week dressed sales were reported at $270-275/cwt delivered, and cattle that traded were being booked for the weeks of December 20th and 27th delivery. From the mid-October high, Western Canadian steer carcasses have dropped 19 lb. Western Canadian fed slaughter over the past four weeks has averaged 43,963 compared to 44,537 head/week last year.

Middle weight calves from 4-600 lb traded unevenly stronger with steer prices steady to $1/cwt higher and heifers rallied $3.75-5.50/cwt higher. Larger calves from 6-800 lb saw steer and heifer prices converge, with steers easing $1/cwt lower and heifers strengthening $2-3/cwt higher. Large feeders over 800 lb maintained momentum with prices steady to $3/cwt higher than the previous week. Auction volumes surged larger to 50,344 head but were 15% lower than the weekly five-year average. YTD auction volumes were 20% larger than the same time last year totaling 1,623,015 head. Feeder exports to the U.S. for the week ending November 20th were the second largest weekly export volume so far this year at 5,389 head.

Non-fed cattle traded mixed last week with D2 cow prices around $1/cwt lower than the previous week and D3’s eased almost $2/cwt lower. Dressed cow bids however firmed $1/cwt higher ranging from $130-135/cwt delivered. Cow slaughter in western Canada has been 13% above a year ago and is 10% higher in the east. Average butcher bull prices this week firmed $1/cwt higher to $97.11/cwt.

Bull.

• Feedlot resolve continued last week and out front packer inventories have tightened.
• Boxed beef prices have softened and a lower beef price point should help move product at retail.
• Cargill appears to have struck an acceptable deal with the employee union.

Bear.

• Local fed cattle have yet to trade south despite an extremely weak fed basis.
• Early placed summer yearlings will increase mid-December market ready supplies.
• Feeding margins pending risk management continue in the red.

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