Cattle on Feed Report: Placements Well Under Expectations

Posted on 10/19/2018 2:41 PM

The Oct. 1 feedlot inventory at 11.4 million head was up 5.4% from last year and record-large for the month, but it came in around 100,000 head lower than anticipated. Placements during September declined 4.6% from last year, whereas traders expected a 0.1% increase, and the figure came in lower than the bottom end of the pre-report range of estimates. September marketings declined 3.6% from last year, which was slightly less than the average pre-report estimate.

Cattle on Feed Report

USDA
(% of year-ago)

Avg. Trade Estimate

(% of year-ago)

On Feed on Oct. 1

105

106.4

Placements in September

95

100.1

Marketings in September

96

97.0

 

The only weight categories that saw an increase in placements last month were lightweights (under 600 lbs.) and heavyweights (1,000-plus lbs.), which rose 4.9% and 4.3%, respectively. But heavyweight placements accounted for only 5.9% of the total number of animals that entered feedlots.

Placements declined 2.9% for 6-weights, 12.2% for 7-weights, 9.5% for 8-weights and 1.8% for 9-weight calves. Kansas placements rose 10,000 head from last year, but the number of calves entering feedlots was down 15,000 head in Colorado, down 50,000 head in Nebraska and down 45,000 head in Texas.

USDA’s quarterly breakdown of feedlot numbers by sex shows steers up 2.3% and heifers up 11.0% from year-ago levels. That’s further evidence the expansion phase of the U.S. cattle herd has run its course.

The report data should be price-supportive Monday, with the most price strength expected in deferred live cattle futures given the much-lower-than-anticipated placements number.

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