Cattle on Feed Report: Bullish

January 25, 2013 08:26 AM
 

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.

 


 

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