USDA Cattle on Feed Report Preview

October Placements Number Expected to Be Lofty

ShayLe Stewart
By  ShayLe Stewart , DTN Livestock Analyst
USDA will release its Nov. 1 Cattle on Feed report on Friday. (DTN/Progressive Farmer file photo by Jim Patrico)

OMAHA (DTN) -- November's Cattle on Feed report is expected to show a lofty placements number since the October report showed placements up a mere 2%.

USDA will release its Nov. 1 Cattle on Feed report at 2 p.m. CST on Friday.

Analysts' projections for cattle placed on feed in October vary a baffling 22 percentage points. But the fact of the matter is that this comes as no surprise. Cattlemen knew that placements were going to be up because: 1) The fall run took its time heating up this year and more calves were traded in October than in late September; 2) Given the market uncertainly fueled by the Tyson Holcomb, Kansas, packing plant fire, cattlemen of all sectors were leery of the market's condition and held calves on grass for longer; and 3) Placement figures since June of 2019 have been lower (June down 3%, July down 2%, August down 2%, September down 9% and October up 2%), and the market typically doesn't see a negative placement pattern like this, so, at some point, the cattle have to trade and be placed. It's obviously given analysts figures that those cattle finally traded hands in October.

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But what kind of market impact will Friday's report have? The funny thing is is that everyone has known for some time now that this report would share lofty placement figures. If the industry wasn't current and was struggling to sell beef products, then a report like this would wreak havoc. But given that the world's supply of protein is off-kilter because of the outbreak of African swine fever in Asian countries and that the U.S. is currently processing cattle at a vigorous speed and able to sell that product off retail shelves at a rapid pace, this report shouldn't cripple the market, though it may play on the psychology of cattlemen.

The cattle market is already entering a correction mode from a near-two-month rally. This report may cause a strong downward trend in a couple of days after the report is released, but it shouldn't have a long-term effect. The market's downside play has been a long time coming.

USDA Actual Average Estimate Range
On Feed Nov. 1 101.4% 98.2-102.5%
Placed in October 112.2% 96.2-119.0%
Marketed in October 99.6% 99.3-100.1%

ShayLe Stewart can be reached at shayle.stewart@dtn.com

(AG)

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ShayLe Stewart