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Negative Pressure Blamed On Canadian Border Opening

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Today 2/26/2005 7:34:00 AM

Feeder Cattle Update: Negative Pressure Blamed On Canadian Border Opening
Compared to last week, feeder and stocker cattle sold weak to 3.00 lower. The full decline was placed on feeder steers weighing over 700 lbs, but even the lighter-weight stockers felt the downside pressure this week. The struggling fed cattle market and disappointing closeouts continue to weigh on the demand for feeder cattle. At the same time, winter wheat backgrounders are very disgusted with the country bids that they are being offered. The profits they had hoped for last fall have evaporated as weight gains have been well below expectations due to the mud, and now the market they had counted on is fading away.

Many of these wheat backgrounders are the early grass interests that have been pushing the market on lightweight stockers. Lower prices usually trickle down in the same manner as the higher prices. However, the demand for stocker cattle remains good and a 3.00 loss on a 4 weight steer market is not nearly as significant as it is on an 8 weight. Much of the negative pressure continues to be blamed on the Canadian border opening.

Although, Canadian live cattle imports will not be allowed to be turned-out on pastures that are sure to be lush after this past winter's moisture. Replacement female buyers were active again this week, which helped stabilize the feeder heifer market. These buyers are looking at the big picture and not so much worried about March 7th. Fed cattle trading turned active on Friday with live sales mostly 1.00 lower from 86.00-87.00 and dressed sales 1.00-2.00 lower at mostly 137.00. Choice boxed beef cut-out values ended the week below 140.00 for the first time this year, which is at the root of our bearish cattle market.

The demand for beef should improve as we approach Easter and backyard chefs reach for their wire brush in preparation for grilling season. This week's reported auction volume included 52 percent over 600 lbs and 44 percent heifers.

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