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Sort and Cull: USDA Cattle on Feed Report Hits Cattle Prices Hard

Elaine Shein
By  Elaine Shein , DTN/Progressive Farmer Associate Content Manager
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When the latest USDA report showed higher-than-expected livestock numbers in the country, it influenced some triple-digit losses in prices. (DTN file photo)

Editor's note: DTN Livestock Analyst ShayLe Stewart will be out of the office for a few weeks. We will continue to update her Sort and Cull blog with livestock market content. Please send any questions or comments to Editor-in-Chief Greg Horstmeier at


The USDA Oct. 1 Cattle on Feed report's bearish surprise for traders on Oct. 20, showing 11.58 million head of cattle on feed, led to sharp losses in the cattle market to begin this week.

In Monday afternoon's DTN Closing Market Comment video, DTN Lead Analyst Todd Hultman noted the influence of the report as he reviewed Monday's market prices.

"For corn, soybeans and livestock ... it was quite a bearish day. Cattle had a bearish on-feed report Friday. The number came in higher than expected, and it hit the cattle prices hard."

In his DTN Live Cattle Market Strategies, Hultman reported heavy noncommercial selling led to December live cattle falling $6.27 to a new four-month low of $178.35 Monday. Monday's slaughter was estimated at 125,000 head, up 1,000 head from 124,000 a week ago, but down from 126,000 last year.

In the live cattle market, prices fell $9 from September highs.

Hultman went deeper into perspective on what is being seen with livestock prices.

"Monday's $6.27 sell-off in December live cattle changed the trend to down as specs ran for the exit after Friday's bearish on-feed report," he said. However, he added, "Fundamentally, the cattle market is still in a bullish situation with herd expansion unlikely anytime soon."

After the report came out last week, there were concerns about additional pressure being felt this week.

"Livestock markets remained extremely weak Friday as cattle traders looked for the faint hope of good news in Friday's Cattle on Feed report. Good news did not come; cattle on feed and cattle placements were above year-ago levels and pre-report estimates," explained DTN Analyst Rick Kment on Oct. 20 after the report came out.

Triple-digit losses were seen Friday in live cattle and feeder cattle, he said, although he added that nearby live cattle contract prices stabilized in late-Friday trade.

"Cattle on feed Oct. 1 increased 1% from year-ago levels. This is the second-highest October on-feed inventory level since the series began in 1996," Kment said. "Cattle placements increased 6% above year-ago levels, leading to the largest placement number since November 2021." There was an 11% decrease in marketed cattle.

Diving into how things looked on the report day Friday, reviewing the week from Friday to Friday, Oct. 13-20, Kment reported the following changes in livestock future prices: October live cattle off $0.85; December live cattle off $2.13; October feeder cattle off $8.05; and November feeder cattle off $9.35.

As for the cash cattle market, "Trade in the North was marked at mostly $294 per cwt, $2 per cwt higher than the previous week. Southern trade developed at $184 to $185 per cwt. This is a $1 to $2 per cwt gain over last week's average," Kment said on Friday. "October live cattle closed (Friday) $0.13 lower at $184.275, December live cattle closed $0.68 lower at $184.625 and February live cattle closed $1.23 lower at $187.725.

"Friday's slaughter is estimated at 118,000 head, 6,000 head more than a week ago and 5,000 head less than a year ago. Cattle slaughter for the week is estimated at 620,000 head, 9,000 more than a week ago, and 12,000 less than a year ago."

As for how feeder cattle prices closed on Oct. 20, "These price swings moved feeder cattle futures to four-month lows, with concern that additional pressure may develop ... October feeders closed $1.75 lower at $241.825, November feeders closed $2.28 lower at $242.225 and January feeders closed $2.33 lower at $243.05."

On Oct. 23, sharp losses continued in the cattle markets.

"Traders had the weekend to digest the bearish news in the Cattle on Feed report, and this led to widespread pressure throughout the entire session," said Kment, in his Monday Closing Livestock Market analysis. He said the concern is that follow-through runaway liquidation will continue to affect technical markets, as well as the outlook of fundamentals in the near future -- and create anxiety across cattle country.

"The increased placement and total cattle on feed number is surprising, but there are also more questions than answers following the report and market reaction. The higher numbers do not prove that overall supply is significantly increased but does raise questions of just how solid market expectations are, given more calves moving into the feedlot system," Kment said.

As for Monday's feeder prices, DTN reported: October feeders closed $4.20 lower at $237.625, November feeders closed $6.43 lower at $235.80 and January feeders closed $7.35 lower at $235.70.

Kment stressed there is still uncertainty about how much the sharp losses in futures prices will affect short-term cash feeder cattle trade, "as feeders are focusing on gaining access to high quality cattle and increasing overall numbers."

Elaine Shein can be reached at

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Elaine Shein

Elaine Shein
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