Moderate trade developed Wednesday drawing from the smaller cash offering. Canfax weighted average prices were generally $1.25-1.50/cwt lower than the previous week. Once again, very few live sales were reported and the majority of last week’s trade was dressed at around $166.75/cwt. The cash to futures basis continues to strengthen as the futures market fell further than the cash market this week. Fed exports to the US for the week ending May 21st were record low with less than 3,600 head going south.

As fed cattle prices continue to track lower and grass orders begin to dwindle, feeder cattle were unable to find price support. The Canfax average steer price last week aligned $2.34/cwt lower while heifers experienced a retreat of $1.97/cwt. Regional price spreads are becoming more apparent, excessive moisture in southern regions has restricted placements and dryer conditions in the north has softened grass interest. Reported auction volumes last week totaled 16,500 head. USDA reported that 1,797 Canadian feeders were exported to the US for the week ending May 21st.

Last week non-fed values were pressured slightly lower with D1/D2 cows averaging under $74/cwt last week. Prices remain firmly intact, supported by a 28% weekly decline in the Western Canadian cow slaughter over the holiday week ending May 28th. Local rail bids have expressed a firm tone sustained by a tighter non-fed supply. For the week ending May 21st Canadian non-fed exports to the US totaled 3,264, fully steady with previous week.

Bull factors

  • Showlist volumes have remained relatively moderate

  • Eastern Canadian packer interest has relieved pressure from our local market

  • The Canadian dollar continues to weaken

Bear factors

  • Canadian fed exports to the US remain 38% lower than the same time last year

  • Below average spring temperatures continue to weigh on beef demand

  • Flooding fears in the US has threatened slaughter plant closures

For more detailed information on markets this week please visit the Canfax website www.canfax.ca.