United States Cattle On Feed Up 2 Percent, Tom Leffler Calls Report Neutral

The latest cattle on feed numbers were in line with trade expectations. On Friday afternoon, the U.S. Department of Agriculture reported the number of cattle and calves on feed totaled 10.8 million head on November 1, 2015. The inventory was two percent above last November. The latest on feed numbers were 3.3 percent below the five year average. Market Analyst Tom Leffler of Leffler Commodities called the latest report "neutral". He said this makes eight straight months that cattle on feed numbers were larger than the previous year.

 

 

Placements in feedlots during October totaled 2.28 million head, four percent below 2014. Net placements were 2.21 million head. This was the largest placement number of the past 12 months. Leffler said placements haven’t been over two million head since October 2014. During October, placements of cattle and calves weighing less than 600 pounds were 645,000 head, 600-699 pounds were 530,000 head, 700-799 pounds were 431,000 head, and 800 pounds and greater were 675,000 head. The 800 plus pound category was up 5.5 percent versus a year ago. Leffler said the 800 pound and larger placements number has been larger than the previous year 13 of the past 14 months.

 

Marketings of fed cattle during October totaled 1.63 million head, three percent below 2014. Marketings were the lowest for October since the series began in 1996. Leffler said marketings were a little better than trade expectations. Other disappearance totaled 75,000 head during October, 23 percent below 2014.

 

In looking at how the latest cattle on feed numbers will impact the market, Leffler thinks it will have virtually no influence. He said the report was in line with trade expectations, so he looks for the report to be ignored by traders. Leffler said the cattle complex continues to struggle with negative fundamentals as cash prices hold lower, boxed beef prices continue to decline and consumers haven't been able to take advantage of lower prices at the retail level. Further, Leffler said trading in the futures market has been erratic and volatile with no tie to the current fundamentals. The December live cattle futures contract has traded limit up or limit down nine of the past 13 sessions. In looking ahead to next week, USDA will release the latest cold storage report on Monday.