Canadian AAA Cutout Finally Equal to US Choice Cutout

The interesting news on the cut-out front is that the Canadian AAA cut-out has finally caught up to the equivalent US Choice cut-out (in Canadian dollar terms). At the end of July the AAA cut-out was reported at $194. Meanwhile the Choice of $188 converted to $193 Canadian equivalent or $1 lower than the Canadian cut-out that week. From February through early June the cut-out spread between the 2 countries was extremely wide, ie US over Canada by $10-25/cwt. It’s not unusual for the cut-outs to trade fairly evenly at this time of year but it was most certainly a welcome sight after the wide spreads that had persisted earlier this year and were a factor in the wide basis levels we saw in the fed cattle market.

cut out graph july 2013
 

Anne Dunford

President of Cattle Trends Inc., which consults for companies and individuals in the cattle business. Also a regular contributor on RealAgriculture.com

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