In terms of market impact, today's Cattle on Feed report trumps the midyear USDA cattle inventory report as the futures market started responding to the anticipated increase in cattle on feed.
"The cattle on feed inventory and marketing numbers were at the top end of the expected range while placements were well above the upper end of expectations, especially cattle weighing between 600 and 700 lbs.," says Justin Gleghorn with Brock Thompson Trading in Amarillo, Tx.
"The market seemed to be prepared for this as October and December live cattle contracts were under pressure on Friday’s close. Overall, the marketings are healthy, but it shows that in the near term there may be some downside pressure to the market as supplies of cattle appear to be larger than expected through the early fall."
The Cattle on feed report showed the inventory and placements increased 4 percent compared to last July, while marketings jumped to 5 percent above July 1, 2010.
USDA's July Cattle Inventory report showed few surprises as the drought ravaged south continues to cull herds. Breeding stock numbers continue to dwindle as the USDA inventory showed replacement heifers and bulls over 500 lbs. down 5 percent. The beef cow herd is down 1 percent compared to July 2010.
Follow this link to full USDA Cattle on Feed report.