Cattle on Feed Report: Bullish
The combination of lighter-than-expected Placements and stronger-than-anticipated Marketings during April left On Feed 1% under year-ago as of May 1. That's the first time since May 2010 feedlot inventories have been below year-ago. And at 11.11 million head, the On Feed tally is the lightest since September 2011, when 10.73 million head were in feedlots.
During April, producers placed 1.521 million head of cattle into feedlots. That's the smallest monthly placements total since July 2009. A weight breakdown of the calves that entered feedlots last month shows: lightweight placements down 20.2%; 6-weight placements down 19.4%; 7-weight placements down 21.6%; and heavyweight placements down 1.7% from year-ago levels. This report confirms what everyone expected -- calf supplies are tightening, which will continue to draw down the fed cattle inventory at least through the end of the year.
Traders were expecting a friendly report, but this data is even more bullish than anticipated -- in all three categories. As a result, cattle futures should open solidly higher on Monday. The biggest risks to the cattle market moving forward are demand concerns and macro-economics.
| COF Report | USDA | Average | Range |
| % of year-ago levels | |||
| On Feed | 99% | 100.3 | 99.4-101.1 |
| Placements | 85% | 88.4 | 82.9-98.6 |
| Marketings | 100% | 98.6 | 96.4-99.2 |
