Canfax Weekly Article | Report for the week of September 12, 2022

Traditionally this is the time of the year the fed market is putting in its summer low, instead the Western Canadian fed market continues to grind higher setting new annual price highs. Weekly dressed sales were reported from $302-304/cwt delivered, cattle that traded last week were being scheduled for the week of October 17th delivery. The Alberta fed cash-to-futures basis was reported at -9.60/cwt, for the middle of September this is the weakest basis since 2016. Over the past four weeks Western Canadian fed slaughter is down slightly, averaging 45,290 head per week compared to 46,753 head per week last year.

Alberta auction volumes were significantly larger last week thanks to a special forward calf sale and reduced pasture conditions. Calf prices firmed higher for all weights on improved quality and larger lot sizes. Strong demand was observed for benchmark steer calves from 5-700 lb with prices rallying $6-8/cwt higher than the previous week. Premiums to spot continue for deferred October delivery. Large feeders over 800 lb traded unevenly with steer prices steady, while similar weight heifers slipped over $2/cwt lower. Total Alberta auction volumes were significantly 243% larger than the previous week at 92,154 head and were 127% larger than the same week last year. YTD feeder exports are 109% larger than year ago totaling 159,453 head.

Non-fed prices traded mixed last week with slaughter cow prices easing $2-3/cwt lower, while butcher bull prices rebounded almost $5.50/cwt higher than the previous week to average $128.36/cwt. Dressed cow bids were pulled in again on softer buying interest to around $205-210/cwt delivered. Slaughter bull exports to the U.S. for the week ending September 3rd were 5% larger than year ago at 1,228 head and YTD volumes are 6% larger totaling 27,008 head.

Bull.

• Feedlots should gain leverage moving forward as market ready supplies tighten following lower placements.
• The Canadian dollar softened to encourage exports.
• Beef remains competitive at retail compared with other meats.

Bear.

• Fourth quarter feed grain prices are rebounding higher.
• Carcass weights are expected to trend larger moving forward.
• Cutout values slipped aggressively lower this week.

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