Cattle on Feed Report: Price-Negative Reaction

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May 1 feedlot inventories at 10.998 million head rose by 2.0% from last year and topped expectations by 134,000 head. The bigger feedlot supply was driven by stronger-than-expected placements in April, which topped year-ago by 11.1% and the average pre-report estimate by 4.2 percentage points. Marketings were also stronger than expected at 2.7% above April 2016 levels, but that wasn't enough to offset the jump in marketings.

Cattle on Feed
USDA
Avg. Trade Estimate
Range
 
 
% of year-ago levels
On Feed
102
100.8
98.1-102.3
Placements
111
106.8
103.1-112.7
Marketings
103
101.8
101.0-102.7


Placements increased in all but the heavyweight category (1,000 lbs.-plus), which dropped 6.7% from year-ago. Lightweight placements (under 600 lbs.) were up 4.2%, 6-weights were up 11.8%, 7-weights were up 25.6%, 8-weights were up 6.5% and 9-weights were up 8.6% from April 2016.

The report data was negative compared to expectations and signals there will eventually be a bigger-than-expected supply of cattle coming to market, but the data continues to signal feedlots are staying on top of their marketings.

 

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