Beef Market Update: A yawning basis, strong cash prices, and cattle moving north and south

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It’s a good news, complicated news, good news sandwich for this week’s Beef Market Update with Anne Wasko of the Gateway Livestock Exchange.

The good news comes in the form of cash prices, which showed strength this week, up about $2, putting south Texas and Kansas numbers around $142. In the north, numbers hit between $140 to $143. The U.S. cut out and choice cut out hovered about $270, in line with seasonal expectations.

Coming back to western Canadian cattle prices, thin trading means that numbers traded within $270 to $275 delivered, on a pretty wide basis, Wasko says. “Last week’s spot basis for fat cattle was about $18 off the U.S., so that’s still lagging, especially with the U.S. market moving higher,” she says. She predicts the basis should improve as the year progresses, but likely not until the second half of 2022.

What’s behind the basis?

“We started with the biggest cattle on feed numbers in over 20 years, so that that really is the root of it. And then of course, when you’ve got big supply, you’ve got to get through them. And so that’s really where it gets really gets down to I think as we go forward, like I say, we’ll move to a lot of these cattle and and get on the other side of it. But that’s really the crux of the problem that we’ve we’ve had lots of cattle on feed, and we knew that coming into 2022. But there’s the result,” Wasko says.

In the full report below, Wasko also lays out the trade numbers between Canada and the U.S., and what we can expect from the upcoming reports on cattle on feed, and cattle inventory.

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