Canfax Weekly Article | Report for the week of June 5, 2023

Fed cattle prices once again established new highs, and weighted average steer prices closed above $240/cwt. Competition on the cash market was good, with both major packers buying cattle. Dressed sales were reported from $400-405/cwt delivered. Most of the cattle that traded would be picked up in one to two weeks. There were a few sales where cattle would not be picked up until late June/early July. YTD Western Canadian fed beef production is 6% lower than last year. Western Canadian fed slaughter totaled just more than 35,000 head, 16% lower than last year. Western Canadian steer carcass weights averaged 842 lb. Dressed sales in Ontario were reported from $390-400/cwt delivered, steady to $20/cwt higher than bids seen last week. Cattle were being booked for next week’s delivery.

The cattle complex continues to rally to record heights, and feeder prices strengthened on tightening supplies to place against the fourth quarter of 2023 and the first quarter of 2024 fed market. Grass interest is generally static on uncertain moisture concerns, while the current fed market rally has freed up increased capital for bunk replacements. Middle-weight steer and heifer calves from 6-700 lb saw prices around $4-5/cwt higher, while heavier weights traded mixed with steers $5-9/cwt stronger and heifers steady to $3/cwt lower. Early bought grass cattle have appreciated significantly during the first quarter of this year and encouraged profit taking at auction now, as opposed to dealing with an increasingly lackluster summer growing season. YTD feeder exports were 44% (49,436 head) lower than a year ago, totaling 62,935 head.

D2 slaughter cows traded $3/cwt higher than the previous week to average $157/cwt, and D3 cows firmed modestly higher to $139/cwt. Dressed cow bids rallied $5/cwt higher to $295-300/cwt delivered trade range. The average D2 cow/Alberta steer price spread weakened to around 65%, as the fed market strengthened. Butcher bull prices traded fully steady, averaging $161.50/cwt. Western Canadian non-fed slaughter for the week ending May 27 dipped 3% lower than the previous week at 6,153 head, and YTD was 9% larger, totaling 160,129 head.

Bull:

• Fed cattle prices continue to surge to new heights.
• Western Canadian steer carcass weights are the lightest since June 2019.
• The beef continues to keep packer margins in the black.

Bear:

• Higher-priced beef is pushing retail consumers to competing meats.
• Dry conditions continue across most of Canada.
• The fed basis typically weakens from May to June.