If you were looking for the the July 1 USDA cattle on feed report to shock the market to the higher side, it did not deliver.
Overall, cattle on feed in the United States were up 4 percent compared to a year ago, with heifers and heifer calves on feed up 11 percent compared to a year ago.
Placements in feedlots during June were up 16 percent in comparison to June 2016. Net placements were 1.71 million head. During June, placements of cattle and calves weighing less than 600 pounds were 375,000 head, 600-699 pounds were 315,000 head, 700-799 pounds were 430,000 head, 800-899 pounds were 385,000 head, 900-999 pounds were 170,000 head, and 1,000 pounds and
greater were 95,000 head.
“The placement number is bearish but the question will be how much more this could drive the market lower since we have pessimism built into the market”
— Anne Wasko —
In early trade on Monday the live cattle futures contracts opened at least two dollars lower, as expected, as traders sell off Friday’s bearish report. Much of the report is commentary on what the market has known as reality for weeks, as Anne Wasko notes.
After the Monday morning sell off is over, how live cattle trade the rest of the week will give many a clearer picture of how much of this July U.S. cattle on feed report was priced into the market.
With the fall looming and getting closer to reality, many feedyards are trying to brace themselves for tight margins in the yard.