Cattle Placements Much Higher Than Expected

Posted on 03/09/2017 10:23 AM

The number of cattle that entered feedlots in April came in much stronger than anticipated at 7% above year-ago, while last month's marketings were lighter than expected. That pushed the May 1 feedlot inventory up 1.3% from May 2105 at 10.783 million head, which was 138,000 head more than the average pre-report estimate implied.

Cattle on Feed
USDA
Avg. Trade Estimate
Range
 
% of year-ago levels
On Feed
101
100.1
99-100.7
Placements
107
99.2
93-110.2
Marketings
101
102.4
100.7-108.4


A weight breakdown of April placements shows all but the 6-weight category up from year-ago levels. As has consistently been the case, the biggest increase in placements was in 7-weights and heavyweights, as feedlots try to limit the number of days they keep calves on feed. Lightweight placements rose 4.4%, 6-weights were down 6.3%, 7-weights were up 12.1% and heavyweights were up 11.7% from year-ago levels.

With all three categories on the "wrong" side of the average pre-report estimates, the report gets a negative read. The Placements figure is the most negative, meaning fall- and winter-month contracts should see the bulk of price pressure Monday, unless traders fade the data.

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