With a Saturday kill under their belt packers pulled up inventories and cleaned up some of the backlog. Feedlots were more willing sellers this week and cleaned up the entire showlist including carryover. The supply of fed cattle is expected to get tight in the coming weeks which should lend support to some better prices. The Canadian dollar and live cattle futures could continue to hinder fed cattle prices.

Three of the big four banks in Canada have all forecast that the dollar will trade in the $95 range from now until the first quarter of 2010, and one speculates that the dollar will reach par by 2010. This will greatly affect trade with the US. For the week fed steer prices were $0.67/cwt higher to average $82.74 and heifers were $0.18/cwt higher to average $81.76. The number of fed cattle sold this week was 24,043 head up 31% from last week and 6% larger than last year.

The Alberta cash to Nebraska cash average was $1.65 stronger than the prior week, with the basis ending the week at $6.22 under. Nearby live cattle futures ended the week $1.45 lower than the previous week. Feeder steers for Alberta averaged $0.70 lower, while feeder heifer prices averaged $1.57 lower for the week ending September 18. Auction market volumes picked up this week and were quite active with a total of 57,540 head sold up 51% from last week and year to date the volume is 1,195,435 down 3% from 2008. Butcher cow prices were lower this week to average $40.52 down $0.34. Butcher bulls averaged $49.62 down $0.51. Nearby barley futures closed the week $8.70 stronger with the nearby futures at $120.70/tonne. This week the Canadian live steer price to Choice cutout value was 54.74% or 1.12% higher.

Bull factors


* Ample feed supply equals cheaper cost of gain.
* Fed cattle trade should be steady heading into next week.
* Feedlots have ample pen space and will be looking to place some cattle.

Bear factors

* Beef demand is sluggish.
* C$ will continue to pressure fed and feeder prices.
* Pork still remains plentiful.