Canfax Weekly Article | Report for the week of September 5, 2022

Western Canadian fed markets continue to grind higher, setting new annual highs. Prices have been higher in eight out of the past nine weeks, gaining $6/cwt over that time frame. Dressed sales were reported from $302-304/cwt delivered, cattle that traded were being scheduled for late September/early October delivery. Western Canadian B4 grade cattle (dark cutters) totaled 872 head; the largest weekly volume seen this year. With warmer temperatures and seasonally more heifers entering the slaughter mix, it is not uncommon to see dark cutter volumes increase during the summer months.

Western Canadian auction volumes continued to trend seasonally larger due to a significant increase in yearlings on offer through electronic sales. Prices for all types of feeders continued to strengthen and are challenging price highs set back in 2016. Strong demand for calves continues to outpace supply and 5-700 lb steer prices firmed $3.50-4.50/cwt higher than the previous week. Steer calf prices have surged over $20/cwt higher in the past three weeks to encourage a significant $10+/cwt price realignment for heifer calves. Large feeder heifers over 700 lb saw a similar realignment to narrow the steer/heifer price spread.

Slaughter cow prices in August tested highs set back in 2015-2016 and overhead price resistance last week pressured prices $2-3/cwt lower. D2 cow prices dipped $2.81/cwt lower to averaged $112.78/cwt and D3 cows slipped over $2/cwt lower to $97.83/cwt. Dressed cow bids were generally $2/cwt lower than the previous week at $218-223/cwt delivered on reduced buying interest. Butcher bulls saw a similar weekly decline with average prices sliding $3.27/cwt lower to $128/cwt. Slaughter bull exports to the U.S. for the week ending August 20th surged 56% larger than the previous week to 1,575 head and was 18% larger than year ago.

Bull

• Strong technical support and a softened Canadian dollar have increased risk management opportunities.
• Feed grain prices continue to soften.
• Adequate forage should slow cowherd liquidation.

Bear.

• Post Labor Day beef demand is anticipated softer.
• The improved economics of feeding cattle longer is pressuring carcass weights larger.
• Cutout values are expected to decline through September despite seasonally improved end meat support.

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