Agricultural News
Leffler Says Cattle on Feed Numbers Bearish News to Futures Market
Fri, 24 Apr 2015 16:47:54 CDT
The U.S. has the largest number of cattle on feed since the start of the year. The U.S. Department of Agriculture released the latest cattle on feed numbers Friday estimating 10.8 million head, as of April first. Tom Leffler of Leffler Commodities said this report looks to be a market mover when the futures market reopens Monday morning.
"This is the largest on feed for 2015 and the third smallest April on feed number of the past ten years," Leffler said.
The inventory included 7.46 million steers and steer calves, up 5 percent from the previous year. This group accounted for 69 percent of the total inventory. Heifers and heifer calves accounted for 3.34 million head, down 10 percent from 2014. Leffler said Nebraska was up two percent, Kansas was up one percent and Texas down one percent versus a year ago.
Placements in feedlots during March totaled 1.81 million, slightly above 2014. Net placements were 1.74 million head. Leffler said this is where we are going to see a bit of negativeness from the cattle on feed report.
"This is the largest placement number of the past five months, it is also the fifth lowest March placement of the past ten years," Leffler said.
Placements in Nebraska were up seven percent, Kansas was up five percent and Texas was down 11 percent versus a year ago. During March, placements of cattle and calves weighing less than 600 pounds was down 14.1 percent with 365,000, 600-699 pounds category was down 5.2 percent at 275,000, 700-799 pounds was down 3.7 percent at 449,000, and 800 pounds and greater had an increase of 16.1 percent at 720,000.
"This leads to the question, are we backing up some heavy cattle in our feedyard and we're not maybe as current as we should be," Leffler said.
Marketings of fed cattle during March totaled 1.63 million, 2 percent below 2014. March marketings are the lowest since the series began in 1996. Other disappearance totaled 69,000 during March, 6 percent above 2014.
After the large gains the live cattle and feeder cattle futures markets had this past week, along with the negative placement number in this cattle on feed report, Leffler said this will likely cause a lower opening for cattle markets on Monday.
"We have seen the futures market go up mainly on technical buying, that could cause us to see some maybe larger than expected selling come Monday morning." Leffler said.
Radio Oklahoma Network's Leslie Smith interviewed Leffler after the report came out Friday afternoon. Click or tap on the LISTENBAR below to listen to the full interview.
In the interview, Leffler also addresses the latest cold storage report from USDA.
Click here to read the full Cattle on Feed report.
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