Cattle on Feed Report: Slightly Negative

Posted on 09/21/2018 2:42 PM

The Sept. 1 feedlot inventory at 11.125 million head was up 621,000 head (5.9%) from year-ago and roughly 58,000 head more than anticipated. The bigger-than-expected increase in feedlot supplies was driven primarily by a 7.4% increase in placements during August, which was a full three percentage points above the average trade estimate. Also, August marketings increased only 0.2% compared to expectations for a 0.4% rise.

 

USDA
(% of year-ago)

Avg. Trade Estimate

(% of year-ago)

On Feed
Sept. 1

106

105.4

Placements in August

107

104.4

Marketings in August

100

100.4


A weight breakdown shows the bulk of the August placements increase was in the lighter weight categories. Placement of lightweight calves (under 600 lbs.) rose 19.4% from year-ago, 6-weights climbed 17.5% and 7-weights increased 10.0%. Placements of 8-weights dropped 2.1% and 9-weights declined 11.1%. Heavyweight placements (over 1,000 lbs.) increased 18.2%, but that category accounted for only 6.3% of the total number of animals that entered feedlots last month.

With all three categories coming in on the negative side of the average pre-report estimates, the data is at least mildly negative. Deferred live cattle futures should face the most pressure from the data given that placements topped the upper end of the pre-report range of estimates. 

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