Market News & Headlines >> Cattle Market Rally Continues on Tight Feedlot Inventory
Despite showing larger-than-expected November feedlot placements, the monthly USDA Cattle-on-feed report released on Dec. 23 was largely neutral relative to trade expectations as November marketings were also strong. The report pointed to historically tight fed cattle supplies during early 2017.
Live cattle futures have continued to rally in the wake of the report, reaching six-month-plus highs as strengthening wholesale beef prices and strong packer margins have boosted packer demand for cattle in the cash market, pushing up cash prices.
USDA pegged the Dec. 1 U.S. feedlot inventory (12-State) at 10.665 million head or 98.7% of a year earlier, closely in line with trade estimates that averaged 98.5% in a range from 97.5%-99.4%. The Dec. 1 feedlot inventory was the lowest for the date in 20 years.
USDA pegged November feedlot placements at 115% of a year earlier compared with trade estimates that averaged 112.3% in a wide range from 104.7%-118.6% according to a survey of 11 analysts by Reuters News Service. The large year-over-year increase in placements is a bit misleading, however, because November 2015 placements were the lowest on record in the current USDA data series going back to 1996.
November feedlot marketings, meanwhile, came in at 116.6% of a year earlier compared with trade estimates that averaged 116.0% in a range from 111.3%-117.6%. November marketings were the largest for the month in 15 years.