Canfax Weekly Article | Report for the week of March 11, 2024

Alberta fed price last week had a strong performance, up $2-10/cwt on the rail. But the cash-to-futures basis remains $8/cwt weaker than the five-year average.

Western Canadian steer carcass weight were 60 pounds heavier than the five-year average. Canadian fed cattle and cow exports to the U.S. have been running above year-ago level since the beginning of the year, with year-to-date volumes up 7 per cent from last year as of February 24th. Canadian fed slaughter for the week ending March 2nd total 50,716 head, down 3 per cent from the previous year.

This week Alberta 550 pound steer calves were trading at a $60/cwt premium compared to the Ontario market. One of the largest premiums to date. Alberta 850 pound steers have rallied 10 per cent since the start of the year, unusual for heavy weight feeder as this time of the year is where they’re at annual lows. Canadian feeder cattle exports to the US for the week ending February 24th totaled 2,680 head compared to the five-year average of 4,275 head.

With cooler temperatures, non-fed volumes through commercial auction facilities were very light, in some instance buyers were unable to assemble full loads to ship to the plant. Butcher cows established new record highs after being up $8.50/cwt from last week.

To highlight how strong the cow market is, the price spread between D2 cows and butcher bulls at $2.50/cwt was the narrowest spread sine April 2014. Over the past 25 years, 2004 was the only time cows established a first half of the year high in March. This suggest there is still more upside moving forwards for cow price.

Bull

• Fed basis continued to be lower than historical averages
• Stronger deferred live cattle prices are supportive to lightweight calves and yearlings being forward contracted
• Expect cow prices to continue to strengthen

Bear

• Canadian fed slaughter year-to-date remains below last year
• Western Canadian carcass weights remain large
• Ontario cash to future basis reached a new low for the year