Canfax Weekly Article | Report for the week of March 8, 2021

Alberta direct cattle sales saw moderate volume trade last week with prices fully steady with the previous week. A handful of live steer trade was reported comparable with the previous week and the bulk of dressed trade was $254/cwt delivered. Average steer and heifer prices closed the week fully steady at $150.92 and $150.22/cwt respectively. Western Canadian fed slaughter for the week ending February 27th was 12% larger than the previous week at 42,041 head and YTD totaled 324,156. Western Canadian fed cattle/cow exports to the US for the week ending February 20th was slightly larger than the previous week and YTD totaled 70,718 head.

Alberta auction volumes totaled just over 50,000 head last week and the last time this happened in March was back in 2010. For the beginning of March, 850 lb steer prices are trading $3/cwt higher than last year and $2/cwt higher than the five-year average. Heavy weight feeder cattle continue to trade near annual price highs. A recently purchased 850 lb steer at $180/cwt to finish at 1450 lbs would need roughly $160/cwt to breakeven for the September fed market. The breakeven cash to futures basis level is +$7/cwt against the October Live cattle futures. Based off the five-year average, the historical September cash to futures basis is -$1.44/cwt. This would suggest cattle are being purchased close to $125/head offside.

Slaughter cow prices leveled off last week, trading steady to $0.75/cwt lower. For the month of February, Western Canadian cow slaughter was down 26% compared to last year. Bull prices strengthened $7.25/cwt. Fewer bulls are being exported; leaving more bulls to be slaughtered in Canada. YTD bull slaughter is up 5% compared to last year. Canadian butcher bull exports are accounting for 52% of total bull marketings.

Bull.

• Fourth quarter feeder placements were light and spring fed market supplies could tighten
• Non-fed supplies are expected to tighten and encourage increased fed harvest
• Tru Harvest Meats has officially resumed slaughter at the former Ryding Regency plant

Bear

• Packer inventory has swelled out to the end of March
• Negative feeding margins persist
• A leverage shift toward the feeder is unlikely until April

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