USDA’s August Cattle on Feed Report was slightly bearish.
On Feed Numbers 2% Below 2024
The August 1 on feed report listed 10.9 million head, down 2% from August 2024 and in line with trade estimate of 98.1%. This is an 8-year low.
Scott Varilek with Kooima Kooima Varilek says, “We’ve had 98% on feed for several months and slaughter is down 6% versus a year ago, so its less numbers. We are still tight. We know it takes a long time to rebuild numbers in the cattle industry and high prices are sure dangled out there all the way out through the deferred futures.”
Placements 6% Below 2024
Placements in feedlots in July totaled 1.60 million head, 6% below last year but above the average trade guess of 91.1%.
Net placements were 1.55 million head. During July, placements of cattle and calves weighing less than 600 lb. were 340,000 head, 600-699 lb. were 245,000 head, 700-799 lb. were 365,000 head, 800-899 lb. were 378,000 head, 900-999 lb. were 195,000 head, and 1,000 lb. and greater were 75,000 head.
Where did the extra placements come from?
Placement data based on weight did not show a signal division greater than a year ago.
The state-by-state breakdown showed a steady increase across most of the states but compared to a year ago the Southern feedlots were well below 2024, tied to the closure of the Southern border to Mexican feeder imports. Northern feeding areas were above last year.
Texas placements were at 75% of a year ago, Colorado at 76%, Nebraska at 98%, while Kansas was at 102% and Iowa was at 118%.
Varilek says, “So it looks like, you know, Iowa, Kansas did a pretty good job at placements year over year. So that’s picking up some of the slack. Texas, Colorado still well, well down. You know, 75% in Texas, 76% in Colorado. So has more of this, you know, Northern kind of feel to it.”
Marketings 6% Below 2024
Marketings in July totaled 1.75 million head, 6% less than the prior year. and in line with estimates of 94.1%.
Other disappearance in July totaled 51,000 head, 9% under the same period last year.
Will the Cattle Market Care?
Live and feeder cattle futures pushed to contract and all-time highs again on Friday with the push from steady to higher cash trade.
So as long as the cash market stays strong will the futures even break in reaction to the bearish placements?
Varilek says the futures market is overbought and due for a correction so the cattle market could open lower Monday and then quickly get bought by the funds.
“Finishing on these highs and putting $18 on the feeders this week, you know, is it going to be enough to really shock it? I think it could be a little bit of a scare just for as fast as we moved higher in that last little section. But I am not sure it can really break this cash market and that’s what has been bailing this market out time and time again,” he explains.
