Cash Cattle Trade to Trump Cattle on Feed Report, Says LefflerFri, 21 Nov 2014 17:18:23 CST
The US Department of Agriculture's monthly cattle on fed report looks to have little impact on the market. Tom Leffer of Leffler Commodities said most of the numbers came in close to industry expectations, minus the placements figure. Leffler looks for the market on Monday to be determined by what happens with cash cattle trade. He said there are indications of cattle selling at $172 in the south, which is equal to a week ago. He said there are also indications trade could be higher at 173 or 174 .
As of November first, the US had 10.633 million head of cattle on feed. Leffler said this was 100 percent of ago and higher than predictions at 99.8 percent. This was 5.7 percent below the five year average. This is also the first year over year increase in the monthly cattle on feed numbers since August 2012. Leffler said Nebraska was up three percent, over a year ago. Kansas and Texas was up one percent versus last year. Leffler said this was the largest on feed number in the past six months.
Radio Oklahoma Network's Leslie Smith interviewed Leffler after the report came out. Click on the LISTEN BAR below for Leffler's full analysis on this report and USDA's cold storage report.
The number of cattle on feed placed on feed was larger than expected. USDA estimated placements at 99 percent, which was higher than trade analysts predictions of 95.7 percent. Leffler said this was the bearish part of the report. Placements were one percent lower than year ago. Leffler said placements in Kansas was down 11 percent, Texas was unchanged and Nebraska was up five percent over a year ago.
"That means we placed 2.357 million head of cattle and it is virtually equal to the three year average and only two percent lower than the five year average," Leffler said. "This is second largest placement of the past 36 months, but it is the second smallest October placement of the last 19 years."
Net placements were 2.26 million head. During October, placements of cattle and calves weighing less than 600 pounds were 690,000, 600-699 pounds were 570,000, 700-799 pounds were 462,000, and 800 pounds and greater were 635,000. The 800 pound category was up over 10.4 percent. Leffler said concerning them as last month the 800 pound category was up eight percent and two months ago it was up by 3.3 percent.
"We are seeing some big cattle backing up there and that is a little concerning down the road here, so its going to be interesting seeing how the market handles that," Leffler said. "...Even though we are killing less cattle, we are looking at higher carcass weights."
Carcass weights this week came in a record levels for steers at 903 pounds and heifers averaged 830 pounds. Those were both a pound heavier than the previous week. Leffler said keep in mind those numbers are delayed by two weeks.
The October marketings of fed cattle totaled 1.69 million, eight percent below 2013. October marketings are the lowest since the series began in 1996. Other disappearance totaled 97,000 during October, 28 percent above 2013.
On Friday, USDA also released their monthly cold storage report. Total red meat supplies in freezers were down 2 percent from the previous month and down 9 percent from last year. Total pounds of beef in freezers were up slightly from the previous month but down 15 percent from last year.
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