Key numbers in Friday's USDA Cattle on Feed report came in on the bearish side of neutral. However, before construing the report as bearish, recognize that the on-feed inventory remains historically low. October placements were the second lowest since the series began in 1996. October marketings were the lowest since the series began.
Cattle and calves on feed for the slaughter market in the U.S. for feedlots with a capacity of 1,000 or more head totaled 10.633 million on Nov. 1, 2014. The inventory was just slightly above Nov. 1, 2013, and just a tad higher than the average trade guess.
Placements in feedlots during October totaled 2.357 million, down 31,000 or about 1% below 2013. Traders expected placements to be down close to 4%. Net placements were 2.26 million head. During October, placements of cattle and calves weighing less than 600 lbs. were 690,000, 600 to 699 lbs. were 570,000, 700 to 799 lbs. were 462,000 and 800 lbs. and greater were 635,000. The lower-than-expected placements could actually be constructive if the reason for the drop is that feeder cattle flat out are not available.
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