Canfax Weekly Article | Report for the week of January 9, 2023

Most Alberta direct cash trade last week was $1/cwt higher than the thin trade seen the previous week at $310/cwt delivered. U.S. bids of US$238/cwt delivered worked back to around a $4.50/cwt live equivalent premium to local rail bids at $190.50/cwt FOB the feedlot. Additional local live cattle sales were reported from $183-183.25/cwt. Kill schedules were generally reported for the first week of February. Weighted average steer prices closed $1.50/cwt higher than the previous week’s market tone at $186.04/cwt. Fed cattle/cow exports to the U.S. for the week ending December 24th were moderate at 8,898 head, and YTD volumes are on track to annually be 10% larger at 492,212 head.

With only 1,700 head of cattle trading at auction from January 2nd to 4th, sale volumes last week were too light to establish a repeatable trading range. The market tone was, however, steady to a little stronger compared to the end of December. Volume wise, Canadian feeder exports to the U.S. have been limited over the past three months as Canadian calf and feeder prices are trading at a premium to the U.S. market. Alberta/Saskatchewan 900+lb steers traded last week via electronics for immediate delivery were reported from $232-243/cwt, with a weighted average price of $238.78/cwt based at 941 lb. Prices are roughly $35-40/cwt higher than a year ago.

Competition on the limited supply of cows on offer last week was met with good packer interest. Compared to the end of December, butcher cow prices were $6-9/cwt higher. Over the past month, packers have allocated more hours than usual to D grade slaughter and for the month of December, Western Canadian cow slaughter is the largest since 2019. Butcher bull prices started the year off on a positive note, gaining $7/cwt since late December and are trading at the highest point since October.

Bull

• North American out-front fed inventories are expected to tighten moving forward.
• Canadian steer carcass weights remain seasonally large.
• December 1st USDA hog report is bullish.

Bear

• Softer post-holiday demand is anticipated for middle meats.
• Canadian steer carcass weights remain seasonally large.
• Calf prices remain lofty and feeding margins continue in the red.

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