Canfax Weekly Article | Report for the week of January 17, 2022

It was a disappointing week for the western Canadian fed market with prices declining $6-7/cwt. Fed cattle prices are $6/cwt higher than last year but $8/cwt lower than 2020 and $5/cwt lower than 2019. Competition on the cash market was limited with one packer not bidding. Dressed sales ranged from $260-262/cwt delivered, and cattle that traded last week will not be picked up until mid-February. Alberta fed cash to futures basis levels weakened from -$12.46/cwt to -$15.62/cwt; the weakest basis for the first half of January since 2009. U.S. buying interest has been quiet and most if not all the cattle heading south are contract cattle. Ontario dressed sales were reported from $288-293/cwt delivered, steady to $2/cwt lower than the previous week.

Warm weather flushed out the first large offering of feeders to auction for 2022 last week, and good demand rallied prices higher. Fed cattle marketings have now freed up bunks and renewed demand was observed for all types of feeders last week. Large lots of quality calves were on offer and good eastern buying interest continued. Steer calves less than 600 lb saw prices surge $7.50-8.50/cwt higher than the previous week. Buying enthusiasm spilled over to similar weight heifers and prices rebounded sharply $11-15/cwt higher. Middle weight 600-800 lb feeders strengthened unevenly last week with heifers gaining significant price momentum as competition moderated the increase for mid-weight steers.

Non-fed prices gained momentum last week with slaughter cow prices fully steady and butcher bull prices firmed higher. Dressed cow bids were generally steady ranging from $142-148/cwt delivered but the market tone appeared sluggish. Salvage cows at auction traded widely on selective buying for different classifications. Butcher bull prices firmed almost $5/cwt higher than the previous week to $104.25/cwt. Some non-fed slaughter inventory will also need to be worked through before the market can seasonally rebound.

Bull.

• The Canfax January 1 Cattle On Feed report indicates December placements were lower and marketings were larger.
• U.S. market ready fed supplies should tighten moving forward.
• There has been active interest on the non-fed market from U.S. buyers.

Bear.

• Omicron in the workplace will continue to limit beef production.
• Rebounding beef values will encourage retail buying resistance.
• The Alberta BSE case could lock exports to Asia for a couple more months.

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