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Cattle on Feed Report Preview    09/23  14:40

Sept. 1 Cattle on Feed Numbers Expected to Be Down 2%, but 
Remain High

By Rick Kment
DTN Analyst

                      USDA Actual   Average Estimate       Range
On Feed Sept. 1                         98.1%         97.2-98.7%
Placed in August                        99.5%        95.0-102.8%
Marketed in August                      99.8%        99.4-101.4%

OMAHA (DTN) -- Cattle on feed as of Sept. 1 are expected to be 
nearly 2% lower than a year ago, according to a Dow Jones survey 
of private analytical firms. USDA will release its monthly 
Cattle on Feed report at 2 p.m. CDT on Friday.
 
On-feed numbers are expected to see the most significant drop 
from a year ago, with pre-report estimates showing an average of 
98.1% on feed. The overall range of estimates is also generally 
tight, giving traders slightly more confidence in the reduction 
of overall on-feed numbers. The first impression of these lower 
numbers is that they would point to a tighter supply of cattle 
in feed yards going into fall and winter. But it is important to 
remember that due to COVID-19 disruptions, cattle on feed 
numbers on Sept. 1, 2020, were significantly elevated due to 
delays in placements and plant closures in the spring and summer 
of 2020. 

A 98.1% on-feed level would still amount to 11.17 million head 
of cattle in the nation's feed yards. Except for 2020's totals, 
this still is the highest number of cattle on feed in over a 
decade. If report totals are in line with analyst expectations, 
this would indicate that seasonal lows have been set during the 
month of July, as increased fall placements will continue to 
move on-feed numbers higher through the rest of the year.

Feeder cattle placements are estimated at 99.5% of 2020 levels. 
This would likely to be considered generally neutral for the 
market and slightly above pre-pandemic 2019 placement levels. If 
Friday's report deviates significantly from pre-report 
estimates, this could be the factor that causes the most 
fireworks in the cattle trade early next week. The biggest 
uncertainty in the entire report is likely to be cattle 
placement levels, with the range of analyst estimates coming in 
rather wide (95%-102.8%). This variability not only points to 
uncertainty between analysts and industry personnel, but also 
takes into account drought situations and larger placements 
earlier in the year. 

A shift in placement levels in Friday's report is likely the 
most significant chance for wild market swings early next week 
and confidence that the coming months will follow previous 
marketing patterns. 

Cattle marketed in August is estimated at 99.8% of a year ago. 
This is likely to be the category least focused on in the report 
and likely to be considered neutral to overall price direction 
following the report.


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