Traders did a very good job anticipating what USDA’s monthly Cattle on Feed Report would show as all three categories were in line with the average pre-report trade guesses. As of Nov. 1, the feedlot inventory was 647,000 head below year-ago.
Report expectations | USDA | Avg. Trade Guess | Range |
% of year-ago levels | |||
On Feed | 94 | 94.2 | 92.0-95.5 |
Placements | 110 | 110.0 | 99.1-118.1 |
Marketings | 101 | 101.5 | 99.6-103.2 |
Placements during October increased 214,000 head from year-ago amid the drop in feed prices and a positive outlook for the cash cattle market into next year. A weight breakdown shows: lightweight placements up 5.9%; 6-weight placements up 15.6%, 7-weight placements up 17.2%; and heavyweight placements up 3.6%. Of the top 11 beef cattle production states, only Oklahoma (down 3%) and Idaho (down 10%) placed fewer cattle on feed last month compared to year-ago.
With the report virtually as expected, there should be very little price response Monday. That will keep focus on the boxed beef and cash cattle markets.
Additional perspective from Julianne Johnston:
