Cattle futures saw sharp declines on Monday following bearish numbers from the USDA on Friday.
Apparently cattle feeders weren’t all that worried about rising feed costs last month, at least not enough to restrict the pace of placement activity. According to the monthly on feed report released Friday afternoon, August in-movement totaled 2.27 million head, 7 percent more than 2009, 8 percent greater than the 3-year average, and the largest late summer total since 2006.
Since the average trade guess anticipated August placement to be virtually even with last year, deferred live cattle futures are expected to open 50 to 100 points lower when trade resumes on Monday.
Approximately 60 percent of the increase involved steers and heifers weighing over 700 pounds. Here what the placement weight breakdown looked like: 800 pounds and over, up 5 percent; 700-799 pounds, up 10 percent; 600-699 pounds, unchanged; under 600 pounds, up 13 percent.
According to the DTN placement model, big lots now have 2.014 million cattle to finish in December, 5 percent more than 2009 and 6 percent greater than the 3-year average.
Even given the fact that last month contained one additional business day than 2009, the 7-percent hike in marketing looks quite impressive. The combination of decent marketing and larger-than-expected placement activity could encourage an initial round of bull spreading Monday.
Although we expect December live to catch some early selling heat, the market may quickly refocus on the nearby feedlot trade as well as the ongoing enthusiasm of noncommercial and fund buying.
September 1 cattle on feed totaled 10.17 million head, 3 percent more than last year and 1 percent above the 3-year average.
Posted with DTN Permission by Haylie Shipp
