Canfax Weekly Article | Report for the week of November 14, 2023

Following 12 weeks of static pricing, average Alberta fed steer prices slipped to a 28-week low. A combination of negative packer margins, increased formula price commitments, and concerns of recessionary reduced demand, all contributed to softer North American fed cattle prices. Scattered light dressed trade was $3-5/cwt lower than the previous week from $385-387/cwt delivered, with some deals including a +$2/cwt premium for 80% AAA’s. U.S. bids failed to attract feedlot attention and few if any cash cattle traded South. The weighted average steer price eased $2.21/cwt lower than the thin trade seen last week to $230.89/cwt.  

Western Canadian calf and feeder prices trended lower as the week progressed. In general, the calf market has fared a little bit better than the heavier weights. Feeders over 800 lb traded $2-6/cwt lower. AB 900+lb heifers for January delivery averaged in the mid $280s/cwt, forward delivery prices are 7% higher than the cash market. Over the past couple of years, the average monthly price increase from November to January stands around 4%. Using a $0.12 price slide, the adjusted 850 lb heifer cash-to-futures basis is around -$17/cwt; slightly stronger than the January five-year (2019-23) of -$20.57/cwt. Canadian feeder cattle exports for the month of October totaled just over 21,000 head, 240% higher than last year. This is the largest October feeder cattle export volume since 2014. 

After four weeks of higher prices, the butcher cow market has exhausted its run, and last week traded $4-5/cwt lower. The market is currently in the process of working through peak non-fed numbers and cow prices are expected to bottom in the next couple of weeks. Over the past month, Alberta cow prices have been trading at a $5-22/cwt premium against the Ontario market. In Western Canada with higher cow prices in October, many speculative buyers that would normally put cows on feed during this time frame, have been sitting patiently on the sidelines waiting for prices to decline.  

Bull.  

• U.S. Corn production for grain as of November 1^st is estimated up 1% from October and 11% higher than year ago. 
• Barley prices continue to hover near annual lows.  
• Feedlots have priced quite a few cattle for first half of 2024. 

Bear. 

• Western Canadian cow slaughter was the largest since February and is take focus from fed slaughter.
• Total feedlot heifer placements from July to October are up 55,000 head.  
• With lackluster retail demand, the beef complex is expected to realign lower.