Cattle on Feed Report: Placements Heavier Than Expected

Posted on 02/23/2018 3:34 PM

U.S. feedlot inventories totaled 11.63 million head as of Feb. 1, according to USDA’s Cattle on Feed Report, up 7.9% from year-ago and 55,000 head more than anticipated. January placements were stronger than expected at 4.4% greater than year-ago, which was above the top end of the range of estimates. January marketings were just a touch greater than expected at 6.1% above last year’s pace.

Cattle on Feed Report

Avg. trade estimate

Avg. trade estimate

 

% of year-ago

On Feed

108

107.4

Placements

104

100.4

Marketings

106

106.0


The increase in placements was in the 6-weight, 7-weight, 8-weight and heavyweight (1,000-plus lbs.) categories, which rose 1.1%, 6.8%, 2.0% and 88.9%, respectively. While heavyweight placements were up sharply, they represented only 85,000 head. Lightweight placements (under 600 lbs.) and 9-weight placements were down 1.3% and 0.9%, respectively. Much of the increase in placements was in the Southern Plains, where drought limited available pasture grass to graze.

The report data is most negative for deferred live cattle futures given the higher-than-expected placements figure. However, the report should be factored into the market relatively quickly and focus will return to cash market fundamentals. 

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