Loonie helps fed price
A sharply weaker Canadian dollar combined with tight market-ready supply helped drive fed cattle cash prices $5 per hundredweight higher in Canada last week.
Fed cattle futures in Chicago fell as traders worried the slowing economy would hurt domestic and export beef demand.
The Canfax average on steers was $96.76 per cwt., up $5.25, and heifers were $96.43, up $5.43, said Canfax.
Volume was down six percent at less than 17,000 head.
The cash to futures basis weakened to $16.10 under compared to $14.66 under the week before.
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The week’s cash trade wound up by the morning of Oct. 22. The futures basis was $3 weaker than the previous week. This was the forecasted general impact that mandatory country-of-origin labeling (COOL) would have on the basis, Canfax said.
Fed exports fell 23 percent from the week before to 10,701 head. That was 46 percent lower than the same week last year.
The exchange rate will likely dominate prices this week.
D1 and D2 cow prices in Alberta fell to $33 to $50.25 per cwt. with an average of $41.54, $2 lower than the week before.
Butcher bulls were $41-$68 with an average of $55.79, 80 cents higher than the week before.
Slaughter cow and bull exports totalled 2,934 head.
Canfax expected cows would trade lower this week and bulls would be steady.
Calf run increases
The feeder steer average was $1.19 per cwt. higher than the week before and heifers were $1.50 higher, said Canfax.
The fall calf run is in full swing and Alberta auction volume rose 84 percent to 75,277 head compared to the week before. That was up six percent from last year.
Light steer calves traded $1.12 to $3.44 per cwt. higher, while heavier steers were 17 to 85 cents higher.
Light heifers traded 58 cents to $2.11 higher and heavy heifers were 53 cents to $3.02 higher.
Canadian feeder cattle exports totalled 4,436 head two weeks ago reflecting worries about COOL. That was down from 11,967 the previous week and down from 19,309 a year ago.
With the calf run in full swing, prices should continue to be steady to stronger, Canfax said.
The weakening Canadian dollar should lend support.
Bred cows were $500-$1,000. Cow-calf pairs were $750-$880.
Recession worries
Worries about recession saw U.S. beef prices fall.
U.S. Choice cutouts fell $2.31 US to close at $143.30 while Select was down $2.38 at $135.82, said Canfax.
The Calgary wholesale market for delivery this week climbed to $154-$164. Montreal was steady at $164.
Dollar supports hogs
In Canada, the weak loonie helped to lift hog prices.
COOL has slashed the volume of market hogs heading south. It dropped by 78 percent in the first two weeks of October compared to the same period last year.
Profitable margins kept the slaughter pace steady in the U.S. and hog prices there were steady despite a large market-ready supply.
In Chicago, hog futures prices fell less than fed cattle on thoughts that consumers would turn to cheaper pork if a recession cuts into their budgets.
Iowa-southern Minnesota cash hogs Oct. 24 were $45-$45.50 US per cwt., mostly steady with prices Oct. 17.
The U.S. pork carcass cut-out value was $65.97 Oct. 24, up slightly from $65.02 Oct. 17.
Iowa dealers speculated that ideal weather this fall had hogs quickly reaching market weight and being sold ahead of schedule, resulting in fewer hogs now.
U.S. slaughter for the week ending Oct. 25 was estimated at 2.296 million, down from 2.358 million Oct. 18.
Ron Plain of the University of Missouri said in his weekly commentary that gilt and sow slaughter indicates producers are reducing the breeding herd at a modest rate. He hoped the breeding herd by December would be at least five percent below a year earlier.
“If we do not lose too much demand, the average cost producers should break even in 2009. Losses in the first and fourth quarter and profits in the second and third quarter seem most likely at the current time,” he wrote.
Bison prices higher
The Canadian Bison Association said the slaughter market was supported by the weak loonie. Grade A carcasses from youthful bulls in the desirable weight range in Canada were mostly $2.30-$2.75, with an estimated average of $2.50 per pound hot hanging weight. Heifers were $2.25-$2.60 per lb. with an average of $2.50.
Cull cows and bulls averaged $1 per lb., with sales to $1.40.
Weight, quality and delivery location affect final price.
Volume pressures price
Beaver Hill Auction in Tofield, Alta., reported 2,067 sheep and lambs and 401 goats traded Oct. 20.
Buyers were cautious. The large volume pressured prices lower. There was good demand for well finished slaughter animals in all classes, but light feeders and off types fell $20 per cwt. More than 400 ewes were sold for slaughter.
Lambs lighter than 70 lb. were $75-$128 per cwt. Lambs 70 to 85 lb. were $100-$120, 86 to 105 lb. were $103-$116 and those heavier than 105 lb. were $108-$116.
Rams were $20-$55 per cwt. Ewes were $14-$44 per cwt.
Good kid goats were $130-$200. Nannies were $45-$135 per cwt. and mature billies were $75-$115.
Ontario Stockyards reported 1,640 sheep and lambs and 166 goats traded Oct. 6.
Lighter, well finished lambs were $5-$7 per cwt. higher. Heavy lambs and goats were steady. Sheep were $3-$5 stronger.
