Favorable Numbers in Bullish Cattle on Feed Report Suggests Continued Currency in Beef MarketsWed, 21 Nov 2018 13:33:35 CST
The USDA released its Cattle on Feed report for the November 1, 2018 on Wednesday morning. Radio Oklahoma Ag Network Farm Director Ron Hays reached out to OSU Extension Livestock Market Economist Dr. Derrell Peel for his reaction to the numbers in this month’s report. You can listen to their complete conversation by clicking or tapping the LISTEN BAR below at the bottom of the page.
“I think the market will react favorably to the November Cattle on Feed report,” Peel said. “Placements in October came in lower than expected and marketings came in a tiny bit higher than expected. It is bullish on sort of both ends in terms of the pre-report expectations. So, the market is going to like this. We’re holding the feedlot inventory in check so short-run reaction here should be very positive to this report.”
Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on November 1, 2018. The inventory was 3 percent above November 1, 2017.
Placements in feedlots during October totaled 2.25 million head, 6 percent below 2017. Net placements were 2.18 million head. During October, placements of cattle and calves weighing less than 600 pounds were 640,000 head, 600-699 pounds were 525,000 head, 700-799 pounds were 450,000 head, 800-899 pounds were 363,000 head, 900-999 pounds were 180,000 head, and 1,000 pounds and greater were 90,000 head.
Marketings of fed cattle during October totaled 1.89 million head, 5 percent above 2017.
Peel says this report suggests that the industry is keeping pace fairly well with this market and staying current. Combined, he says these numbers issued by the USDA show that the industry is dealing with larger supplies and larger overall beef production about as well as one could ever expect to. Placements came in perhaps a bit surprising, but Peel says that can be explained with early movement of stocker cattle pushed by producers taking advantage of this year’s ample opportunity for wheat pasture grazing. Peel says this report is consistent with the narrative he has been tracking all year and although the steer slaughter number has been stubborn to come up relative to where it was last year, he expects that gap to be closed as we approach the end of the year. Peel attributes much of this year’s ability to stay current to sustained robust demand that has helped to pull product through the market. He sees no reason for that demand situation to change in the near future.
Click here to see the USDA’s Cattle on Feed report for November 1, 2018 for yourself.
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