The surprisingly expanded numbers of Stockers and Feeder Cattle placed on feed during APRIL, 107% of a year ago, is seen as BEARISH for the Live Cattle and Feeder Cattle futures outlook next week. Most analysts were expecting smaller numbers of Cattle to be placed during April. Numbers of Fed Cattle marketed were quite close to the Trade’s pre-report expectations.
The sharpest expansion for Cattle Placed was concentrated in the heavier weight classes. Apparently, the expanding U.S. calf crop can support greater numbers of cattle available to fill feedlot’s pen space after several years of smaller Calf Crops. This should support an expanding Beef availability for domestic consumers for 2016 and 2017. Apparently, this year has had very good gains on Pasture and Range, some Stockers and Feeder Cattle were likely heavy enough and needed to be moved into feedlots in order have enough days on feed to be able to reach the more highly valued Choice grade or higher.
The USDA released the monthly Cattle of Feed report May 20, 2016 for feedlots with greater than 1,000 head capacity; the report showed:
The May 1st Cattle on Feed Inventory were reported at 10,783,000 head, 101% of a year earlier. This was well above the trades pre-report expectations. Since the cattle placed tended to be heavier animals, most will become market ready with fewer days on feed.
Cattle Placed on Feed during April, were shockingly large at 1,664,000 head, 107% of a year earlier despite continuing large feeding loses for feedlots. Cattle placed into feedlots during April were concentrated in the heaviest weight groups. Kansas had the greatest year over year expansion for cattle placed at 117.5% followed by Texas at 113.0%. Apparently, the favorable pasture and range conditions this year, cattle had excellent gain rates and likely were heavy enough they had to be moved into feedlots to get enough days of feed to grade Choice.
Cattle Marketed during April were reported to be 1,658,000 head, 101% of last year. This year, May had one less working week days compared to a year ago.
Other Disappearance is forecast 76,000 head, 115% of a year ago levels; this was a rather expanded number of cattle outplaced from feedlots during April.
This year, the May 1st Cattle on Feed Inventory had less seasonally contraction than usual. We anticipate in coming months Cattle on Feed inventories will contract likely to lows on August 1st or September 1st.