Lower Canadian prices and wider basis increased interest from U.S. buyers, which will help support the fed market. As will tightening supplies towards the end of 2011, and seasonal increases in beef consumption and the movement of higher-priced cuts. Basis should narrow seasonally as we move through the fourth quarter. As always we need to keep an eye on the economy and its effect on consumer spending. Any renewed strength in the dollar will take some profit out of the fed market.
Tighter calf supplies coupled with excess feedlot capacity will continue to fuel feeder prices through the fall run. Volumes will pick up as producers wrap up harvest and focus on weaning in the coming month. Negatives include rising feed grain prices brought on by tighter supplies, any gain in the dollar and negative economic news that may pressure the deferred live cattle futures.
Normally rising cow numbers pressure prices as cattle move off summer pastures. This year will be no different. The dollar is higher than a year ago which limits exports. However, strong demand for grinding and trim product should lend support. The seasonal low is usually seen in November before the cull cow market picks up again in December. Last year saw a seasonal decrease of 14 per cent or just over $8 per cwt from August to November.