COF Report: Friendly Compared to Expectations

Posted on 03/09/2017 10:20 AM

USDA's Cattle on Feed Report showed the Oct. 1 feedlot inventory at 10.266 million head, just 38,000 head (0.4%) more than last year and 92,000 head less than expected. The lower-than-expected feedlot inventory came amid much-lower-than-anticipated placements (down 1.9% from last year), which more than offset a slightly lower-than-expected marketings pace (up 5.5%).

Cattle on Feed Report
USDA
Avg. Trade Guess
Range
 
% of year-ago levels
On Feed
100
101.3
100.2-102.1
Placements
98
103.6
97.4-108.2
Marketings
105
106.2
103.2-108.8


The weight breakdown of September placements showed a divergence from the recent trend of placing heavier animals. Heavyweight placements (800 lbs. and over) were down 3.0% from year-ago during September. Lightweight placements were down 14.8%, 6-weight placements were up 3.4% and 7-weight placements were up 9.4% from last year's levels.

While the report data is friendly compared to pre-report expectations, cattle futures may not see much price strength from the report. Futures firmed ahead of the report on corrective short-covering and it's been very difficult to find buyer interest in the cattle market.

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