November 19, 2009

Analysts' projections for the US Department of Agriculture's upcoming cattle-on-feed report show more cattle placements and fewer marketings last month.

 

The USDA's monthly cattle-on-feed data is to be released Friday (November 20) at 1500 EST (2000 GMT).

 

The Dow Jones Newswire's monthly survey of market analysts' average projected number of cattle on feed as of Nov. 1 is 101.6 percent of a year ago. The average was derived from a range of 100.6 percent to 102.5 percent.

 

The number of cattle placed into feedlots in October was estimated to be 105.5 percent of a year earlier, with the range of estimates going from 102.6 percent to 109.4 percent. The number of cattle marketed to packing plants during the month was expected to be 97.8 percent of a year ago, with the range of estimates at 96.0 percent to 99.3 percent.

 

"We've seen cattle placements go up the past few months and there is no reason for that trend to change with Friday's report," a brokerage firm's cattle trader said. "But, you have to remember that we've been making these comparisons to decreased placements last year after the economy went south."

 

University of Missouri livestock economist Ron Plain forecast October placements at 101.9 percent based on cattle that backed up on pastures earlier this year that produced a supply backlog.

 

More cattle, said Plain, likely came to market last month when corn prices were relatively low. He also pointed out that October is normally the month that has the biggest placement number of the year.

 

Elaine Johnson, an analyst with CattleHedging.com, forecasts on-feed for November 1 at 101.5 percent due to lighter marketings and increased placements in recent months.

 

Furthermore, an industry source said, packers were reluctant to slaughter cattle because of their inability to move beef that was competing with less expensive pork and chicken.

 

"The October 1 number was the first time in 1 1/2 years that the on-feed number came in above a year ago," said Johnson. "But, you're comparing this to a lower on-feed base last year and now we're going back to a normal level of placements."

 

October cattle marketings dipped because there was one more Saturday and one less week day, said Plain, who is anticipating a 96.5 percent marketing outcome.

 

"Marketings don't appear to be terribly out of line given what was placed last spring," said Johnson. "What's more, profitably for cattle feeders has been minimal at best."