Truthfully, I've come to rather dislike the Cattle on Feed report. It rarely ever positively affects the market when appropriate to do so, but if there is even the slightest hint that the report could be viewed as "less than desirable" or, heaven forbid, "bearish," the report will negatively impact the marketplace.
That's what we are currently seeing with the latest Cattle on Feed report, which was released Friday, April 21.
Even though both placements and on-feed totals are still lighter than year-ago figures, because the actual USDA numbers came out differently than what analyst estimates were, the report is affecting the live cattle market like a burr under a horse's saddle.
So, I ask you: Does it matter where the report's actual findings land? Or just how they vary from analyst estimates? Because, in the case of this last COF report, we were told a cut-and-dried story that more cattle were placed as drought conditions continue in Texas and Oklahoma and as feeder cattle buyers try to "get ahead of the market" since they know feeder cattle supplies will likely dwindle in the second half of the year.
I think the market's reactionary nature to the COF report needs to change. It's time we look at the numbers, look at the fundamental make-up of the marketplace and then make our trading/marketing decisions as opposed to reacting if there's a slight difference between actual USDA numbers and the estimates analysts provide.
ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com
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