By Theopolis Waters
CHICAGO, Feb 19 (Reuters) – The number of cattle moved into U.S. feedlots in January slipped one percent from last year, according to a government report on Friday, nearly matching average industry forecasts.
Feedlots were cautious about buying feeder cattle while struggling to recoup 14 straight months of lost profits, partly blamed on those once-expensive feeder cattle, said analysts.
Cattle that entered feedlots last month will arrive at packing plants beginning around June, the analysts said.
Friday’s USDA report showed January placements at 1.779 million head, down one percent from 1.789 million last year, and close to analysts’ average forecast of 1.771 million.
The USDA put the feedlot cattle supply as of Feb. 1 at 10.709 million head, which nearly matched 10.713 million a year ago. Analysts, on average, had forecasted a marginal decline.
The report said the number of cattle sold to packers, or marketings, dropped two percent in January from a year ago, to 1.589 million head. It was the lowest result for the month of January since USDA started tabulating the data in 1996.
Analysts projected a 1.6 percent reduction from 1.625 million last year.
“This report is sharply neutral with no surprises in any of the categories,” said Allendale In. chief strategist Rich Nelson.
Of interest, however, is the 17 percent year-over-year drop in placements of feeder cattle under 600 pounds and 2.7 percent bump in those over 800 lb, said analysts.
Don Roose, an analyst with U.S. Commodities, said the mi,ber of feeder cattle outside of feedlots remain historically large. That, he said may cap potential slaughter cattle price rallies, as suggested by the light-weight category, heading into the summer months.
With respect to CME live cattle futures on Monday, analysts said the report will “take a back seat” to late Friday’s prices for wholesale beef and market-ready, or cash, cattle.
