Canada cattle report: Factors pressure fed cattle market

Growing market ready supplies and sluggish beef demand continues to pressure the fed market. The Canfax weighted average steer price last week closed at $110.79/cwt, down $1.29 while heifers slipped $0.72 lower to average $110.76/cwt. Last week sales volumes totaled just over 18,700 head, up 16% from the previous week. Western Canadian fed cattle slaughter for the week ending February 4th totaled 34,294, 13% larger than the previous week. Canadian fed exports to the US for the week ending January 28th totaled 6,927 head.

A large volume of feeder cattle were offered at auction last week and prices were generally moderately lower. Overbought fundamentals and a less supportive fed market challenged feeder prices last week. Canfax average feeder steer prices were down $0.50/cwt and heifer prices eased $0.18/cwt lower. The Western Canadian calf index closed last week at $167.09/cwt, down $2.15. Auction volumes of 35,950 head were 34% larger than the previous week and seasonally are expected to trend larger throughout February. USDA reported Canadian feeder exports to the US for the week ending January 28th 17% larger than the previous week at 1,978 head.

D1, D2 slaughter cow prices traded fully steady last week while D3 prices firmed $1.25/cwt higher. Butcher bull prices again trended higher and averaged $82.63/cwt last week. Exports of non-fed cattle to the US for the week ending January 28th were down 11% to 3,191 head.

Bull factors

• North American cutouts have strengthened.

• The beef marketing chain is tight.

• China has resumed Canadian tallow importation.

Bear factors

• Carcass weights continue to trend larger.

• Lackluster beef demand continues to slow packer kill.

• The par loonie has dampened live cattle exports to the U.S.

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