The Sept. 18 USDA Cattle on Feed report stated the Sept. 1 U.S. feedlot population at 9.986 million head, up 3% annually, which essentially matched expectations. August placements proved surprisingly low, with the 1.632 million total marking a 5% annual drop and the lowest August result in the large-lot data series extending back to 1996. The report was viewed as generally supportive as a consequence.

August marketings at 94% of last year were only slightly below expectations, but that also marked a record August low for the large-lot reports. The red line in accompanying chart depicts the decline in the August sales totals, while the blue line represents that same number divided by the number of August workdays. That clearly shows how extraordinarily low last month’s marketings actually were.

Such small supplies might easily have limited downward price pressure during August, but that wasn’t the case. Instead, market-ready feedlot supplies and the average weight of animals sold apparently surged, thereby suggesting fed cattle and beef supplies could prove excessive this autumn.

The latest demand indications aren’t very positive either. Tuesday’s USDA Cold Storage report stated ending-August U.S. beef stockpiles at 470.4 million pounds, up 10.9 million from July. That contrasts to the historical average implying a 9.9 million monthly drop during August, which in turn suggests the wholesale beef market didn’t clear despite the comparatively low production total. We still think cattle prices will stabilize and start a seasonal advance in the near future, but suspect the size of the anticipated comeback will prove rather modest in the short term.

Editor’s Note: Dan Vaught is a livestock economist for Doane Advisory Services, St. Louis, Mo. Doane distributes a number of timely, relevant newsletters to farmers that contain expert commentaries and market advice. For more information, call 314.569.2700 or go to: www.Doane.com.