The widely expected significant increase in October feedlot placements was confirmed in Friday’s monthly Cattle on Feed report. Although less than most expected (see below), positioning ahead of the report provided the opportunity some had been seeking for a market correction.
Live Cattle futures closed an average of $1.52 lower
Feeder Cattle futures closed an average of $3.03 lower.
Wholesale beef values were sharply lower on light demand and moderate offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was $2.29 lower Friday afternoon at $232.57/cwt. Select was $2.54 lower at $211.32.
Corn futures closed mostly fractionally lower to 1¢ lower.
Soybean futures closed 1¢ to 4¢ lower.
Major U.S. financial indices closed higher Friday. Once again, many ascribed movement to U.S.-China trade talks; positive this time.
The Dow Jones Industrial Average closed 109 points higher. The S&P 500 closed 6 points higher. The NASDAQ was up 13 points.
Feedlot placements in October were significantly higher than the previous year, as many expected, but a little less than pre-report estimates, according to Friday’s monthly Cattle on Feed report for feedlots with 1,000 head or more capacity.
There were 2.48 million head placed, which was 10.19% more (+299,000 head) than last year. Ahead of the report, amid a wide range, analyst consensus was for an increase of 12%.
In terms of placement weight, 46.02% weighed 699 lbs. or less; 40.05% weighed 700-899 lbs.; 13.93% weighed more than 900 lbs.
“If you remember back to last year, drought throughout the Plains brought many more calves to market through the summer months than in recent times,” say analysts with USDA’s Agricultural Marketing Service (AMS). “This year, with the excellent grazing conditions and uncertainty fueled by the fire at a packing plant in Kansas, producers were content to graze calves longer. At some point, though, these cattle had to show up at auction or be marketed directly to feedlots.”
Marketings in October of 1.88 million head were 0.64% less (-12,000 head), which was in line with expectations.
As of Nov. 1, there were 11.83 million head on feed, which was 1.19% more (+139,000 head) than the previous year.
Beef in Cold Storage Declines
Total pounds of beef in freezers Oct. 31 were 1% less than the previous month and 10% less than a year earlier, according to the monthly Cold Storage report issued Friday.
Frozen pork supplies were record large for the month, up 3% from the previous month and up 8% from last year.
Total red meat supplies in freezers were up 1% from the previous month but down 1% from last year.
Total frozen poultry supplies were 7% less than the previous month and 3% less than a year earlier.