The latest Cattle on Feed report came in largely as expected Friday afternoon, offering little surprise to the market overall, though lower placement numbers could shape feeder cattle trade in the days ahead.
That’s according to David Erickson with Ag Optimus, who told the Rural Radio Network the report closely matched pre-report estimates across the board.
“One could say that the analyst kind of had it pegged right where the USDA had it pegged, because there wasn’t a lot of variance from where the average estimate was,” Erickson said.
Cattle on feed came in at 99% of a year ago, essentially in line with expectations. Placements were reported at 93%, also near the average estimate, while marketings landed at 94%.
Despite the lack of deviation from estimates, Erickson pointed to placements as a notable feature within the report.
“When you really break it down and look at the amount of head that we’re actually placed, it’s the lowest that we’ve had in quite a while,” he said. “So the placement number is plenty low, I think overall, when you look at the grand scheme of things.”
That decline could have implications for feeder cattle markets moving forward, particularly following a volatile trading session on Friday.
Marketings were less of a surprise, he said, reflecting recent slaughter trends.
“If you kind of follow along on the slaughter reports that come out every week, you know that we haven’t killed as many head,” Erickson said. “We’ve really been slowing the chain down.”
He added that packer margins remain under pressure, though there are early signs of shifting pace.
“At some point in time, they probably want to start making money, and by my estimates, they haven’t been doing that for quite a while,” Erickson said.
With few surprises in the data, attention now turns to how markets respond when trading resumes next week.
“Perhaps that was all baked into the market already, but we’ll see what Monday brings,” he said.
