Cattle on Feed Report: Mildly friendly on the surface, but underlying data fully bullish
USDA estimated there were 11.03 million head of cattle in large feedlots (1,000-plus head) as of Aug. 1, down 259,000 head (2.3%) from last year and 140,000 head less than the average pre-report estimate implied. The marked the 11th consecutive month of year-over-year declines in feedlot inventories – a trend that will continue. Placements fell 8.3% from year-ago levels in July, while Marketings dropped 5.3%. The placements figure was lower than anticipated after consecutive months when that category topped expectations.
|
USDA |
Average Estimate (% of year-ago) |
|
|
On Feed on Aug. 1 |
97.7 |
98.4 |
|
Placements in July |
91.7 |
94.5 |
|
Marketings in July |
94.7 |
94.8 |
Placements declined sharply versus year-earlier levels in all categories except heavyweights (1,000-plus lbs.), which were unchanged, but only totaled 75,000 head. Placements fell 8.8% in lightweights (under 600 lbs.), 10.7% in 6-weights, 8.6% in 7-weights, 8.8% in 8-weights and 5.1% in 9-weights. Placements fell 40,000 head in Colorado, 35,000 head in Kansas, 20,000 head in both Nebraska and Texas, and 31,000 head in “other states.”
While the report data is just mildly friendly compared to the average pre-report estimates, the underly figures are fully bullish, as feedlot supplies will continue to tighten.
