Cattle on Feed Report mostly neutral

USDA estimated there were 11.279 million head of cattle in large feedlots (1,000-plus head) as of Sept. 1, which was up 45,000 head (0.4%) from year-ago and the average pre-report estimate. August placements also rose 0.4% from last year, while marketings topped year-ago by 6.4%.  

A weight breakdown of placements showed lightweights (under 600 lbs.) up 6.2%, 6-weights up 1.6%, 7-weights down 3.2%, 8-weights up 0.8%, 9-weights down 1.8% and heavyweights (1,000-plus lbs.) down 5.0% from year-ago levels. On a state-by-state breakdown, placements rose in Texas (up 35,000 head), Nebraska (up 15,000 head) and Kansas (up 5,000 head) while they declined in Colorado (down 40,000 head) and “other states” (down 6,000 head).

The data is generally neutral and won’t likely have much impact on prices, though there could be some bull spreading (nearby contracts firmer and deferred futures lower) in live cattle with both marketings and placements near the top end of the pre-report range of estimates.