With less cattle slaughter capacity in Canada, many ranchers and feedyards are concerned about the possibility for the feeder cattle and live basis to significantly widen. A basis that gets too wide makes the current Canadian model unworkable.
Currently the live cattle basis sites at 16-18 which is the same as last year at this time. No reason to panic yet but the concern on the minds of producers right now is basis risk. This concern is definitely more so than the live futures price.
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