Cattle on Feed: Placements Top Expectations

Posted on 03/22/2019 3:18 PM

There were roughly 11.796 million cattle and calves on feed as of March 1, which was roughly 133,000 head higher than the market anticipated and a 0.7% gain from year-ago levels, whereas traders had anticipated a 0.4% drop.

As usual, placements were the focal point, and they came in quite a bit higher than anticipated, rising 2.2% from year-ago whereas analysts on average had looked for a 3.8-point drop. Indeed, that topped the top industry guess for a 1.5% gain. This could weigh on deferred contracts next week.

Marketings during February rose just 0.5% from year-ago, whereas the market had anticipated a 1.5% increase. The implication that producers had not sell fed cattle and suggests an upward bias to market-ready supplies still in feedlots. That could in turn translate into pressure on cash and nearby futures prices.

 

USDA

Avg. Trade Estimate

(% of year-ago)

On Feed on March 1

100.7

99.6

Placements in February

102.2

96.2

Marketings in February

100.5

101.5

 

The breakdown of cattle placed in feedlots in February showed most categories up from year-ago, with lightweights rising 4.6%, 6-weights gaining 3.0%, 8-weights up 5.2% and heavy weights up 30%, with the heaviest weight category making up just a small portion of all placements. Numbers dropped in just the 7- and 9-weight categories, falling 1.3% and 10%, respectively.

While the numbers are not extremely bearish, they are likely to put on a damper on bullish enthusiasm next week, especially after cash cattle trade picked up around $128 — lower than the market had hoped. 

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