Cattle On Feed Preview                 06/22 12:05

By John Harrington
DTN Livestock Analyst

                        USDA Actual  Average Guess      Range
Cattle On Feed:
On Feed June 1             xxxxx        102.5%      101.5-103.5%
Placed in May              xxxxx        110.5%      106.5-114.0%
Marketed in May            xxxxx        109.0%      103.5-111.0%

The new monthly USDA Cattle on Feed report scheduled for release 
Friday afternoon is expected to contain yet another package of 
aggressive placement activity and a large marketing effort. And 
with the former expected to eclipse that latter by 50,000-60,000 
head, the June 1 bunk line stands to be documented as the 
largest early summer on-feed population seen since 2012.

Barring a major statistic shock, the report should confirm a 
significant jump in feedlot placement for the third consecutive 
month. Indeed, Friday's report could document the fourth time in 
the first five months of 2017 that the percent hike in feedlot 
placement has exceeded last year by double digits.

Anyone familiar with the extraordinarily high level of cattle 
feeding profits this year can hardly question the sexy incentive 
to place steers and heifers. If the average trade guess noted 
above essentially nails the actual placement level for May, the 
total will exceed the three-year average by 13% and represent 
the most active in-movement since 2012.

Traders and analysts anticipate another large marketing total as 
well. Discounted futures and strong basis levels no doubt 
encouraged many feedlot managers to pull ready and near-ready 
cattle forward ASAP. Additionally, last month's marketing total 
exceeded 2016 in part thanks to one additional business day.

Despite the bearish implications this reports threatens to 
contain, some will understandably argue that the board's current 
discount in deferred live futures means that the possibilities 
of such negative consequences are already on the table.

For more Harrington comments check out 
http://www.feelofthemarket.com