October 18, 2012

In September from a year earlier, the number of cattle placed in US feedlots dropped sharply as the worst drought in half a century damaged crops and drove feed grain prices sharply higher.

Also, drought in the south western part of the country last year, covering cattle states like Texas and Oklahoma, damaged pastures causing ranchers to shrink the US cattle herd to its smallest in 60 years. That resulted in fewer feeder cattle being available now, the analysts said.

Although Chicago Board of Trade corn futures fell 4.7% in September, the average price for the month of US$7.71 per bushel was the second highest on record.

Soy futures hit an all-time high of US$17.94-3/4 per bushel on September 4. The average price for the month of US$16.83 per bushel was the second highest on record.

The following forecast is for the October cattle-on-feed report to be issued by the USDA at 2 p.m. CDT (1900 GMT) on Friday October 19. On average, analysts expect September placements to be down 14.9% from a year earlier to 2.101 million head.

The cattle supply at feedlots as of October 1 was expected to be down 2.2% from a year ago at 11.034 million head.