Cattle on Feed Report: Mildly Negative

Posted on 03/09/2017 10:19 AM

USDA's Cattle on Feed Report showed the Dec. 1 feedlot inventory was a modest 16,000 head bigger than the average pre-report estimate implied at 10.652 million head. That's down 148,000 head from last year (-1.4%) and the smallest Dec. 1 inventory on record. While November placements topped the average pre-report estimate, so did marketings. The sharp year-over-year jump in marketings was due mostly to one extra business day this year versus November 2015.

Cattle on Feed
USDA
Avg. trade estimate
Range
 
% of year-ago levels
On Feed
99
98.5
97.5-99.4
Placements
115
112.3
104.7-118.6
Marketings
117
116.0
111.3-117.6


A weight breakdown of animals placed into feedlots last month shows lightweight (under 600 lbs.) placements steady with year-ago, 6-weights up 26.6%, 7-weights up 37.1% and heavyweight placements up 5.3% from year-ago levels.

Live cattle futures declined following the reports, with the biggest declines in spring- and summer-month contracts in reaction to the heavier-than-expected placements number. The sharp runup in futures ahead of the report gave traders a reason to take profits before the extended Christmas weekend. Whether there's followthrough selling next week will depend largely on post-Christmas wholesale beef trade.

 

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