Tuesday, February 27, 2024

Placements Skyrocket in Bearish On Feed Report



USDA Actual:  107{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Average Guess:  106.5{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Guess Range:  105{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} – 107{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}


USDA Actual:  110{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Average Guess:  104.5{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Guess Range:  101.5{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} – 107{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}


USDA Actual:  97{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Average Guess:  96.5{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

Guess Range:  95{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} – 98{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}

After such a rough week in the cash and futures trade, feedlot managers would have welcomed even neutral news in the May 1 on-feed report scheduled for release this afternoon.

Unfortunately, such a respite in bearish news was not to be.

The monthly inventory turned out to be more negative than expected, especially in terms of the large April placement total. Most analysts were betting that feedlot in-movement last month would be 4{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}-5{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} larger than the early spring of 2010. While they had the increase part right, the official government measure proved to be twice as large.

Specifically, big lots placed 1.795 million head last month, 10{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} more than 2010, 13{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} greater than the three-year average, and the biggest amount for the month since 2003 (making it the second-largest April feeder buy in the record book since the current data series started in 1996).

If the size of the placement was understated, private analysts were generally correct in anticipating where greater in-movement would surface. Drought conditions across much of the South Plains forced many would-be stockers into Kansas (placement up 21{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}), Oklahoma (up 33{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}), and Texas (up 28{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}) feedlots.

Although the placement weight breakdown did confirm a large number of light cattle moving into feedlots, it was a bit surprising to see decent increases in the heavier categories as well: under 600#, up 23{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}; 600-699#, up 3{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}; 700-799#, up 4{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}; 800# and over, up 10{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2}.

Look for deferred live futures to open moderately lower on Monday, pressured by this show of ample placement activity. Indeed, the premium status of deferreds could make them especially sensitive to this negative news.

For more Harrington comments check out www.feelofthemarket.com

John A. Harrington can be reached at john.harrington@telventdtn.com


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Posted with DTN Permission by Haylie Shipp



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