OSU Cattle Market Economist Derrell Peel Offers His Take on the November Cattle on Feed ReportSun, 24 Nov 2019 08:30:56
The USDA released its Cattle on Feed report for the November 1, 2019, on Friday afternoon. 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 hear their conversation by clicking on the LISTEN BAR below.
Peel says, in general, the numbers are what he was expecting, "This is pretty close to the average and close to a number of individual analyst expectations. The Marketing's number was quite close, just fractionally lower than the average trade guess. To me, it's a neutral report like I said, the market has been a little bit defensive here lately, so it may be taken as slightly bearish, but I don't think it will be a major reaction."
According to the report, available here, Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.8 million head on November 1, 2019. The inventory was 1 percent above November 1, 2018.
Placements in feedlots during October totaled 2.48 million head, 10 percent above 2018.
Marketing's of fed cattle during October totaled 1.88 million head, 1 percent below 2018.
Peel says he is not surprised by these numbers and he does think they will average out over the next couple of months, "We had four months of year over year decreases in placements which led to September and Octobers cattle on feed numbers being down year over year for the first time going back to December 2016. This puts us back above year-earlier levels a little bit. We're probably working sometime in the next 3-4-5 months to the peak in this cycle, if you will, for the flow of cattle through the feedlots. Then we will see that top out and begin to pull back a little bit from that. So its all pretty consistent with where expect we are in this overall cattle number situation."
The overall status of the cattle markets has shown some strength in recent weeks, and it seems like the overall attitudes around the business has picked up a bit. Peel agrees, "It really has. All of these markets really bottomed in Mid-September, we've had a tremendous run in both cash and futures. Until very recently, the futures markets have obviously have acted a little bit toppy here lately, and we've pulled back a little bit. The feeder cattle market, in the most recent days, has pulled back a little bit. This thing has probably peaked out here for the near term. Not that I'm looking for any major weakness, but I think we've probably had our run for the fall, and we will see this thing kind of move through hear sideways, and we are going to coast out through December and through the rest of the year and see how we set up coming into the New Year."
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