The slow economic recovery in North America has continued to be a dark cloud that has hung over cattle feeders and the whole industry. Impacts are being felt as a result of the combination of the rise in the Canadian dollar, which has limited returns and exports, and the job market still being uncertain and limiting consumer expenditures and beef demand. On a more positive note, Canadian packers have stepped up to the plate and bought cattle aggressively. Unfortunately packers continue to have a large backlog to push through and carcass weights remain large. For the week fed steer prices were $2.32/cwt lower to average $77.83 and heifers were $1.73/cwt lower to average $77.19. The number of fed cattle sold this week was just over 12,000 head down 24% from the previous week and 33% lower than last year. The Alberta cash to Nebraska cash basis average was $3.15 weaker than the prior week, with the basis ending the week at $7.10 under.

Nearby live cattle futures ended the week $1.93 higher than the previous week. Feeder steers for Alberta averaged $2.79 lower, while feeder heifers averaged $3.59 lower for the week ending October 16. Auction market volumes were larger this week with the total for the week 62,826 head up 25% from the previous week and year to date the volume is 1,401,778 down 2% from last year. Butcher cow prices were lower this week to average $35.80 down $2.54. Butcher bulls averaged $46.12 down $2.59. Nearby barley futures closed the week $0.40 lower with the nearby futures at $150.00/tonne. This week the Canadian live steer price to Choice cutout value was 55.58% or 1.36 lower.

Bull factors

* Retailers doing good job featuring beef.
* Margins between pork and beef at the retail level have narrowed.
* US expecting tight supply in late October early November.

Bear factors


* Carcass weights continue to be record large.
* C$ moving closer to par.
* Beef demand remains sluggish.