Cattle placed in U.S. feedlots for fattening surged by 10 percent in May, the U.S. Department of Agriculture said on Friday in data that suggested beef supplies will be ample and prices potentially lower in the third quarter of 2016.
However, analysts polled by Reuters predicted the spike in placements. Coupled with steep losses in cattle futures tied to turmoil surrounding Britain's referendum to leave the European Union, the data was likely to have minimal effect on futures when they reopen on Monday.
"We have to assume that this is already priced in," said Rich Nelson, analyst at brokerage Allendale Inc.
USDA in its monthly Cattle on Feed report said 1.884 million head of cattle were placed in feedlots last month, up from 1.719 million in the same month last year and below the 2.051 million head placed in May of 2014.
Analysts polled by Reuters predicted placements would rise by 9.2 percent.
Cattle in feedlots as of June 1 totaled 10.783 million head, or 101 percent of last year, roughly in line with analyst estimates of 102 percent. Marketings of cattle shipped out of feedlots to slaughterhouses were 1.794 million head, or 105 percent of last year, in line with the average estimate of 1.796 million head.
"It's kind of neutral - close to the average guess," Nelson said, adding that cattle producers likely boosted placements to take advantage of strong profit margins seen in May.
Chicago Mercantile Exchange live cattle futures tumbled to four-year lows this week as some traders positioned themselves for potentially bearish data. Live cattle forward prices also are discounted to front-month July futures, indicating that prices may have already peaked for the year.
USDA in a quarterly Hogs and Pigs report also released on Friday showed bigger-than-expected expansion in the U.S. hog herd. With U.S. supplies of beef, pork and poultry in cold storage all plentiful, consumers should be able to buy meat at competitive prices, according to John Ginzel, analyst at brokerage The Linn Group.
"It depends on the level of demand, but we'll have plenty of meat around us," Ginzel said.
He noted that some of the biggest gains in cattle placements came in animals weighing 700 lbs and up, in cattle that likely came off pasture.