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Healthy coyotes have beautiful, soft coats. They may not smell like roses, but "nasty fur" is not a distinguishing feature of the coyote. I work with many types of furs (taxidermy and craft work) and coyote would have to be my all time favorite to work with.
Coyotes do interbreed with wolves, but coyotes and wolves are still completely separate species. The offspring of coyote-wolf breeding's are hybrids. By saying that all coyotes are mixed with wolves would be to say that there are no coyotes- only hybrids.
Not sure but owners of small dogs should be aware that coyotes will consider a small dog a tasty snack (and coyotes are nearly everywhere).
As for the difference- in North America anyway the wolves (Gray wolf/Timber wolf) you find will be substantially larger. 40 lbs is a big coyote, about 1/2 the size of a smaller Timber Wolf. The wolf lives in wilderness areas, the coyote can live quite close to the city. I think we have sometheing called a Red Wolf in the south that are more coyote sized, but still bigger at about 60 lbs. They are very rare and exhibit other differences like color and hunting habits.
Coyotes are extremely adaptable and are as likely to be out during the day as night whereas wolves are mostly nocturnal.
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