USDA’s monthly audit of feedlot activity showed all three categories on the bullish side of pre-report expectations, giving the report a clear bullish read. Given the recent sharp price break, cattle futures should be higher to sharply higher Monday in reaction to this data.
The combination of fewer-than-expected placements and greater-than-anticipated marketings last month left the number of cattle on feed as of Jan. 1 below expectations. The number of cattle in feedlots continues to decline compared to year-ago... and now importantly, is lower than the previous month for the first time since September. The year-over-year and month-over-month decline in feedlot supplies should continue for months to come as cattle numbers tighten.
COF Report | USDA | Average | Range |
% of year-ago levels
| |||
On Feed | 94
| 95.6 | 94.2-96.2 |
Placements | 99 | 104.1 | 96.2-108.8 |
Marketings | 98
| 93.2 | 90.2-95.0 |
A weight breakdown of cattle placed into feedlots last month shows: lightweights down 10%; 6-weights up 7.8%; 7-weights up 5.3%; and heavyweights down 0.8% from year-ago levels. Given severe drought through much of the Plains, the rate of placements would likely have been greater if not for a limited supply of calves due to recent active placements.
