It may be a stretch to call anything in the cattle market bullish at this point, but today’s Cattle on Feed Report fits the bill. All three categories came in on the bullish side of the pre-report estimates, with the Placements category being the most friendly. The combination of an 11% drop in Placements and a 4% increase in Marketings last month pulled the Dec. 1 U.S. feedlot inventory in line with year-ago.
| Report expectations | USDA | Avg. Trade Guess | Range |
| % of year-ago levels | |||
| On Feed | 100 | 101.0 | 100.4-101.7 |
| Placements | 89 | 95.8 | 92.0-100.0 |
| Marketings | 104 | 102.7 | 101.4-104.0 |
Placements for all four weight categories dropped from year-ago during November. That’s a change as heavyweight placements (800-plus lbs.) had been running above year-ago. The sharp plunge in cattle prices deterred feedlots from refilling supplies. Lightweight placements (under 600 lbs.) dropped 15.3%, 6-weights fell 10.1%, 7-weights plunged 16.0% and heavyweight placements were down 1.2% from year-ago.
Cattle futures should respond positively to this data Monday since it was more bullish than traders expected. Keep in mind, there are expanded limits Monday -- $4.50 for live cattle futures and $6.75 for feeder cattle -- due to today’s limit-up performance. Key is whether this data is enough to put a low in the market or if traders are waiting to sell a bullish reaction.
