March placements easily top expectations

USDA estimates the April 1 inventory of cattle in large feedlots (1,000-plus head) totaled 12.105 million head, up 208,000 head (1.7%) from year-ago and 160,000 head more than the average pre-report estimate implied. The bigger-than-expected increase was driven by placements, which declined only 0.4% from last year, whereas traders expected a 7.8% drop. March marketings were just fractionally less than anticipated at 2% under last year’s pace. 

Compared to last year, March placements dropped 7.4% for lightweights (under 600 lbs.), increased 1.5% for 6-weights, rose 3.9% for 7-weights, declined 1.5% for 8-weights, increased 2.9% for 9-weights and were unchanged for heavyweights (1,000-plus lbs.). Nebraska placed 30,000 head more cattle than year-ago during March, while placements were unchanged in Kansas and Colorado. Placements dropped 30,000 head in Texas and 8,000 head in “other states.”

As of April 1, there were 7.54 million head of steers on feed, up 133,000 head (1.8%) from last year and 4.565 million heifers in feedlots, up 75,000 head (1.7%) versus year-ago.

The report data is bearish, as the April 1 feedlot inventory and March placements both topped the highest pre-report estimates. That will weigh on the market Monday. But barring a heavy round of sustained fund liquidation, we doubt there will be much lasting impact.