USDA’s Cattle on Feed Report showed feedlot inventories up around 1% at 10.853 million head as of April 1, which was in line with expectations. Placements are up 5% from year-ago but slightly lower than expected, while Marketings were up 7% from year-ago and slightly greater than expected. As a result, the data gets a mildly friendly read.
| Report details | USDA | Avg. Trade Estimate | Range |
| % of year-ago levels | |||
| On Feed | 101 | 100.9 | 100.07-101.5 |
| Placements | 105 | 106.4 | 96.6-111.0 |
| Marketings | 107 | 106.1 | 97.7-108.0 |
The weight breakdown of calves placed on feed last month shows feedlots continue to favor placing heavier animals. Lightweight placements were down 3.6%, 6-weights were steady, 7-weights were up 10.2% and heavyweight placements were up 6.9% from year-ago levels. Given the sharp plunge in cattle prices and the discount structure in far-deferred contracts, it’s not surprising that feedlots want to limit the number of days cattle are on feed.
With the report numbers coming in slightly better than expected and given the sharp drop in prices into the report, the data should support short-covering Monday. But it’s a stretch to think this report is enough to encourage sustained buying -- even if the downside is overdone and futures are undervalued.
