January 28, 2013

In a sign of high feed costs continuing to roil the industry after the worst drought in half a century, the number of cattle placed in US feedlots in December fell for a seventh straight month.

The decline was against trade expectations for the first monthly increase in placements since May.

The USDA showed placements down 1% from a year earlier to 1.664 million head, extending its string of monthly declines since May. The average analyst estimate was for a 3.8% increase.

USDA put supply of cattle in feedlots on January 1 at 11.193 million head, or 94% of the year-ago total. Analysts polled by Reuters, on average, expected 95.5%. And, the government said the number of cattle sold to packers, or marketings, in December was down 2% from a year earlier, to 1.745 million head versus forecast for a 6.9% reduction.

Analysts viewed Friday's cattle report as bullish for Chicago Mercantile Exchange live cattle futures on Monday, with some analysts calling the market to rise by as much as US$0.01.