July 28, 2008

US traders call cattle-on-feed data mixed for futures

Traders gathered on the floor of the Chicago Mercantile Exchange on Friday (July 25) for the US Department of Agriculture's (USDA) monthly cattle-on-feed report called the outcome mixed for futures this Monday (July 28).

The USDA reported the July on-feed number at 96.0 percent, compared to the average estimate of 95.5 percent and a range from 94.9 percent to 96.3 percent.

June placements were quoted at 91.0 percent versus a 91.8 percent average estimate. The projected placement range was 87.8 percent to 101.0 percent.

And, the June marketed number came in at 92.0 percent, against a 95.0 percent forecast average derived from a 93.0 percent to 98.5 percent estimated range.

"The placement number could be viewed as friendly to back-month cattle while the marketing figure at 92.0 percent might pressure front cattle contracts," a cattle trader said.

However, the cattle trader pointed out that spot August's and nearby October's retreat before the close might "take some of the sting out of USDA's results" relative to the front cattle months.

Meanwhile, the federal government's semi-annual cattle data showed all cattle and calves at 100 percent of a year ago, compared with a 99.3 percent average based on a 98.4 percent to 99.8 percent forecast range.

And USDA also reported a 100 percent annual calf crop figure versus last year. The annual calf crop average estimate was 99.4 percent derived from a range of 98.7 percent to 100.1 percent.

"The numbers for the top two categories were at the high end of expectations which may be viewed as somewhat bearish for cattle futures," the trader said. "However, very few people actually pay attention to the semi-annual numbers that will take a back seat to the cattle-on-feed outcome and whatever happens with cash cattle prices today (Friday)."