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.
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