TheDairySite.com - news, features, articles and disease information for the dairy industry

News

CME: Latest COF Report Shows Y-o-Y Changes Within Ranges of Pre-report Estimates

25 October 2017

US - USDA’s National Agricultural Statistics Service (NASS) released their monthly "Cattle on Feed" report on Friday, reports Steiner Consulting Group, DLR Division, Inc.

Just like last month’s report, the year-over-year changes were within the ranges of pre-report estimates for animals marketed, placed, and the overall on-feed count.

Importantly, as we discussed last Wednesday, just like last month all those ranges were wide, especially for placements. Finally, as happened a month ago, head placed came in near the highest of the pre-report estimates and was significantly above the average.

To summarize the year-over-year changes reported by NASS compared with the pre-report estimates:

  • Animals placed during September were up 13.5 per cent, the pre-report average increase was 7.5 per cent. The difference in terms of head between the pre-report average and the reported number was 113,000 head.
  • Cattle marketed by feedlots were 2.9 per cent above 2016’s, while the pre-report average was for an increase of 2.6 per cent.
  • The inventory of cattle in feedlots as of October 1 was up 5.4 per cent from a year ago, compared to a pre-report estimated jump of 4.7 per cent.

Animals placed into feedlots were the largest for the month of September since 2011. Of the major US cattle feeding states, head placed exceeded the expectations of the author, except for Kansas which had only a 4 per cent year-over-year rise. Regarding the placement weight breakdown, nationally all categories posted increases compared to a year ago.

Even though the head marketed was not a surprise, that statistic and the role its been playing in the market deserves more discussion. Marketing’s of fed cattle have been aggressive. There was one less slaughter day this September than a year ago, so average daily marketings were 8.0 per cent above 2016’s. That trend has continued and resulted in a counter-seasonal rise in September's daily marketings (see the following graphic).

A critical result of the marketing pace has been year-on-year declines in slaughter steer and heifer dressed weights. To a large extent, the market environment has since late 2016 been pulling animals through the feeding stage of the production system, and that has driven weights below a year ago (see the graphic below).

For the last five weeks (four weeks for heifers) carcass weights have been essentially flat (the latest week of data is for the week ending 7 October). As a reminder, the weight declines earlier this calendar year also were caused by the cattle market situation and not severe winter weather. The bottom line is, at this time a backlog of market ready cattle is not apparent.

Head placed during September that weighed over 800-pounds was 14.4 per cent (115,000 head) above 2016’s. The bulk of those cattle, with normal winter weather, will achieve slaughter weight during the first three months of 2018. That is the timeframe where, based on the market fundamentals, futures market prices would mostly respond today.

Below is a summary of USDA-AMS weekly reports.

 

Further Reading

You can view the USDA's Cattle on Feed report by clicking here.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


TheCattleSite News Desk

Our Sponsors

Partners


Seasonal Picks

British Field Crops 2nd edition