When it comes to summing up this past week in the beef market, Anne Wasko of the Gateway Livestock Exchange says there are two stories to look at when it comes to the cash market.
In the U.S., the cash market didn’t really come up, unfortunately — it’s still sitting around that $119 mark. However, in western Canada, we did get some gains.
“Our averages are going to be up about a buck and a half,” says Wasko, in this week’s Beef Market Update. “So we’ll get up to about that $163.50 area. In the 160’s means there’s probably some cattle finally back in the black. It’s been a long time, but that’s where the market is going to average this week. So that’s good news.”
The other story to this, according to Wasko, is the continuation of a strong cutout value — closing over $316 Thursday night on the choice.
“That’s up over $10 from last week,” she says. “Demand continues to be strong. Exports are record large. Of course we’ve got this pent up demand as restrictions get lifted, and, processors in the U.S. aren’t getting through as much cattle as they’d like. So, when you kind of short the supply a little bit, that’s going to keep that cutout strong.”
Part of the storyline behind that western Canadian cutout price — which is around $272 to $276 delivered — is that we’re going to be at another week at a record spot basis.
“$19/100 over the U.S. market this week. Over! Our five year average is 11 under for this week. It’s incredible. That’s how that’s come about in terms of the market being so strong here,” Wasko explains, adding the Ontario dressed market is pretty steadily at $252.
That fed cattle basis is also translating into very strong feeder cattle basis, says Wasko. “Believe it or not, if you’re selling feeder cattle today — fed March and April are 8 and a half weight, priced. Here in Alberta, it was about $15/100 over the U.S. equivalent cash market.”
Check out the full Beef Market Update, below: