Largest Cattle on Feed Number in Past Three Years, Reaction from Tom Leffler of Leffler CommoditiesFri, 18 Sep 2015 18:13:55 CDT
The latest cattle on feed report showed friendly news. On Friday, the U.S. Department of Agriculture released the latest figures, as of September first. The nation has 9.99 million head on feed. That was three percent above last year. Nebraska saw an increase of over four percent, while Texas and Oklahoma was unchanged versus a year ago. Market Analyst Tom Leffler of Leffler Commodities said this was the largest September on feed number of the past three years.
"Today's on feed number is the tenth time, out of the past eleven months, that the on feed has experienced year over year increases," Leffer said. "So we are continuing to see a report larger than what it was a year ago."
Leffler said placements came in on the friendly side with placements coming in 5.5 percent below trade expectations. USDA reported August placements totaled 1.63 million head. He said that was 18.6 percent lower than the five year average, the second lowest August placement number of the past 20 years and the third largest placements of the past nine months. Nebraska was down four percent, Texas was down six percent and Kansas was down ten percent versus last year.
During August, placements of cattle and calves weighing less than 600 pounds were 395,000 head, 600-699 pounds were 215,000 head, 700-799 pounds were 362,000 head, and 800 pounds and greater were 660,000 head. In watching the heavy weights, Leffler said the 800 plus pound category was up 3.9 percent.
"Now the 800 pound placements have been higher now the previous 12 of 13 months, so we continue to see those heavy weight cattle coming in, which is also one of reasons we're seeing such heavy weight cattle coming out of feed yards, also," Leffler said.
August marketings totaled 1.59 million head, six percent below 2014. Leffler said this was 16.4 percent below the five year average and the eight straight month that the monthly marketings are at the lowest point of the past 20 years. Kansas was down one percent, Nebraska was down nine percent and Texas was down 13 percent compared to a year ago.
"So, overall, we're looking at a friendly report mainly due to the lower than expected placement numbers," Leffler said.
The futures market ended the week with three consecutive sessions of lower trade for live and feeder cattle futures contracts making new contract lows. Leffler said the selling has inundated this market to the point of no return.
"One thing to keep in the back of your mind, that all the bearish news seems to come out at the bottom of a market," Leffler said. "So, we could find a turnaround in this market unexpectedly somewhere in the near future. Hopefully we will. Also, keep in mind cattle futures are notorious for putting in spiked tops and spiked bottoms."
Radio Oklahoma Network's Leslie Smith interviewed Tom Leffler of Leffler Commodities Friday afternoon. Click or tap on the LISTENBAR below to hear the full interview.
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