Canada cattle report: Canada's packers cleaned up fed offering

Stronger oil prices have re-energized the Canadian dollar which restricted US buyer interest and was negative to fundamentals. Underlying support was realized as local packers cleaned up last week’s fed offering. The Canfax weighted average steer price closed the week at $110.15/cwt, up $1.21 while heifers experienced gains of $1.81 to close at $110.37/cwt. Showlist volumes were fully steady with the previous week. Given the bounce in fed values, accumulated sales volumes totaled 21,100, up 30% from the previous week. Fed cattle exports to the US for the week ending October 8th totaled 8,588.

Last week the Alberta average stocker and feeder values were the highest seen since October 2001. Light weight heifers were $3.00-5.00 stronger, while short keep steers and heifers traded generally $1.00 higher. The Canfax average steer price advanced $1.87 while heifers gained $2.58. Last week the Western Canadian 500-700lb feeder calf index was reported at $155.38/cwt. up $2.58. Reported auction volumes totaled 67,100 up 67% from the previous week and for only the fourth time this year auction volumes were larger than year ago levels. Feeder exports to the US for the week ending October 8th totaled 494.

A good supply of non-fed cattle came to auction last week. D1, D2 slaughter cow prices eased $0.72/cwt, averaging $67.11/cwt. D3 cows traded $0.50/cwt lower to range from $52.00-68.00/cwt. Butcher bulls remain on a downward flight easing nearly $1.00, to average $74.67/cwt. Non fed exports to the US for the week ending October 8th totaled 2,988.

Bull factors

• Fed supplies have remained current.

• Our cash to futures basis has been on a narrowing trend.

• A surge in boxed beef load counts remain supportive.

Bear factors

• Canadian dollar is trading near parity.

• North American packer margins remain at or below breakeven levels.

• US cattle on feed placements were above pre report estimates.

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

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