COF: Placements More Aggressive Than Anticipated Last Month

Posted on 08/24/2018 2:56 PM

Today’s USDA Cattle on Feed report was seen as moderately bearish by industry analysts, since July placements at 7.9% over year-ago topped expectations for a 6.3% rise. The report stated the Aug. 1 U.S. feedlot population at 11.093 million head, up 4.6% from last year, which set a new August record for the large-lot series begun in 1996.

 

USDA

(% of year-ago)

Avg. Trade Estimate

(% of year-ago)

On Feed
Aug. 1

104

104.5

Placements in July

108

106.3

Marketings in July

105

104.7

 

The feedlot industry rather clearly remained aggressive in putting yearlings on feed. The July placement total at 1.742 million head represented a solid annual increase, but fell far short of the July 2011 record of 2.135 million. And while feedyard managers were likely pursuing replacements rather aggressively, dryness in several states, particularly Missouri, caused farmers and ranchers to sell young stuff more actively than they might have preferred. That apparently inflated the placement result somewhat.

July feedlot marketings at 1.873 million head topped the comparable year prior result by 5.0%, which is about what one would expect given the added workday (21 total) experienced last month versus the July 2017 figure at 20. Feedlots did move a lot of cattle last month, but ‘per day’ marketings virtually matched.

Given the large placement figure, the record-large Aug. 1 feedlot population, as well as Friday’s futures breakdown, look for a decidedly lower opening Monday morning.

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