Canada cattle report: Cash to futures basis in Canada narrows

A standoff materialized as improved processing margins saw packers reluctant to give up ground which was countered by producers expressing unrest looking to minimize feeding losses. Canfax average steer prices trended $1.50/cwt lower last week and heifers eased $0.75/cwt lower. Despite improved fundamental levels, local bids were slow to realign, which enticed producers to look south of the border for price support. The cash to futures basis narrowed $1.50 as we switched to the June contract. Accumulated sale volumes were down 31% from the previous week and moderate carry over volumes will be added to this week’s showlist. USDA reported Canadian fed exports to the US for the week ending April 21st totaled 10,638.

Light buyer interest was observed on all types of feeder cattle last week and prices were generally pressured over $3.00/cwt lower than the previous week. Steers and heifers less than 700 lbs saw prices trend $3.00-4.50/cwt lower and feeders over 800 lbs saw prices $2.00-3.00/cwt lower than the previous week. The Western Canadian feeder index closed at $138.43/cwt, down $3.55 from the previous week. Auction volumes were 19% smaller than the previous week at 21,400 head. USDA reported Canadian feeder exports to the US for the week ending April 21st totaled 4,276.

D1,2 slaughter cow prices eased $1.00/cwt lower last week and D3 cows traded $0.50/cwt lower. Butcher bull values softened $0.36 lower and averaged around $90.20/cwt. USDA reported Canadian non-fed exports to the US for the week ending April 21st totaled just over 3,350 head.

Bull factors

• Monday technical support has set an optimistic tone
• Carcass weights are trending lighter
• Processing margins are in the black

Bear factors

• Tight short term feed grain supply is pressuring costs higher
• Competition from competing meats is impairing demand locally and abroad
• Fed carryover developed in Canada and the US last week

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

1. U.S. wheat conditions well below average
2. Post-tornado composting a solution for disposal of dead livestock
3. Cornell genetic testing process cuts cost by up to 75 percent
4. Angus Foundation receives $28,500 from “The Card Challenge”
5. Commentary: In praise of animal foods
6. 100K Pathogen Genome Project maps first genomes

1. Michigan hay buyers should plan purchases early
2. New animal identification rules aid disease traceability
3. Seven jobs more dangerous than farming
4. Survey reveals most Americans in favor of COOL
5. Drought losses in Oklahoma top $400 million for 2012
6. Post-tornado composting a solution for disposal of dead livestock

1. Meat and climate change: How significant is the impact?
2. BeefTalk: How do we get the next generation to raise beef?
3. Commentary: GMOs: How do I hate thee?
4. Survey reveals most Americans in favor of COOL
5. Farm bill and immigration reform action needed
6. Boxed beef hits record highs, cattle weak to lower