USDA Cattle on Feed Report Preview

OMAHA (DTN) -- Attention in the cattle market this week is being squarely placed on the upcoming Nov. 1 USDA Cattle on Feed report, which will be released at 2 p.m. CST Friday. One of the reasons there is so much attention and uncertainty based on this upcoming report is that the higher-than-expected placement and cattle-on-feed numbers reported in the October report has led to a wild and volatile market swing over the past month.

The concern that additional volatility may once again follow this report moving into the holiday-shortened week of Thanksgiving has disrupted market gains seen over the last couple of days. Early analyst estimates for the end-of-the-week report predict an increase in cattle on feed numbers as of Nov. 1, with an average estimate for a 2.1% increase from a year ago. The range of analyst estimates remains generally tight, from a 1.4% to 2.6% increase, which indicates there is a general consensus that overall, on-feed numbers will likely be higher, but not significantly. If the report comes in as estimated, total cattle on feed would be 16,000 head fewer than a year ago. If overall on-feed numbers are below year-ago levels, this will help to support current price levels in the coming weeks and months.

Cattle placements into feedyards during the month of October will once again be the focus of the upcoming report. The average of analyst estimates for cattle placements in October is pegged at 107% of last year. At this level, it would be the highest placement of cattle in feedyards since October 2019. Any deviation from this placement estimate has the potential to create significant market volatility in either direction following the report. Analyst expectations for placement numbers are also all over the board, indicating very little consensus on how many cattle were moved into feedyards in October. Analysts' estimates for cattle placements in October ranged from 102.7% to 108.1% of last year's levels. This leaves the market open for widespread speculation in the days to come.

Cattle marketed during the month of October is targeted to be lower than a year ago with the average analyst estimate at 98% of year-ago marketing totals. If that estimate proves accurate, a total of 1.675 million head would have been marketed in October, which would be 10,000 head above September levels. But it would be significantly subdued compared to recent summer levels.

Traders and market followers alike continue to look toward this report with much anticipation, although the price shifts over the last three weeks have likely already started to adjust for traders' expectations of what the report will uncover. It is likely that if Friday's report is tightly aligned with pre-report estimates, cattle markets will remain lightly traded in a narrow range early next week. But any deviation from current estimates in Friday's report could unleash a flurry of market chaos, with the potential of moving prices in either direction.

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

	USDA Actual	Average Estimate	Range
On Feed Nov. 1		102.1%	101.4-102.6%
Placed in October		107.0%	102.7-108.1%
Marketed in October		98.1%	97.2-98.5%

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