Today’s USDA September cattle on feed report may lend some light support to markets as it was termed neutral to slightly bullish when viewed against pre-release estimates, according to some analysts. But while it may slow selling in an oversold cattle futures market, there are doubts that if will produce a “rocket” turnaround.
Cattle and calves on feed on October 1 were at 10.8 million head, up 5% over Oct. 1, 2016 with placements up 13%, at 2.15 million head, according to the USDA’s Agricultural Statistics Board.
PLACEMENTS WATCHED
Larger-than expected-placements were at 2.15 million head, 13.46% above last September and September marketings at 2.94% were greater than last year at 1.783 million head.
Placements of animals between 900 and 999 pounds were at 285,000 and analysts said these would be hedged against the December futures contract might lend light support to that contract.
USDA said the count included 6.93 million steers and steer calves, up 2% from the previous year. This group accounted for 64% of the total inventory. Heifers and heifer calves accounted for 3.88 million head, up 13% from 2016. Industry estimates for the on feed category were about steady with the actual figure, at 4.6%.
Placements in feedlots during September were 2.15 million head, 13% above 2016. Pre-report estimates by Reuters and others were at 8%. Net placements were 2.09 million head. During September, there were 405,000 placements of cattle and calves weighing less than 600 pounds. There were 340,000 head between 600-699 pounds and 490,000 head at 700-799 pounds.
SHORT COVERING POSSIBLE MONDAY
At 800-899 pounds, there were 515,000 head placed and 285,000 placed at 900-999 pounds. There were 115,000 head placed at 1,000 pounds and greater.
Fed cattle marketing during September was at 1.78 million head, 3% above 2016. Other disappearance totaled 58,000 head during September, 38% above 2016.
Cash and futures prices have been pressured heavily recently, making it unlikely the COF numbers will cause a quick jump. Some short-covering might develop next week, one analyst said. As the cattle futures markets are oversold, the report might lend some ideas to halt the heavy selling of futures, the analyst said.