By Theopolis Waters
CHICAGO, Jan 22 (Reuters) – The number of cattle placed in U.S. feedlots in December slipped one percent from a year earlier to their lowest level since 1998, saod a U.S. Department of Agriculture report on Friday.
The trade however had expected a four percent decline.
Nevertheless, analysts expect the report will have little impact on prices next week.
Feedlots finally bought less-expensive calves that had grown heavier on healthy pastures for several months, said analysts.
The placements appeared even larger when compared with placements the year before, when fewer animals were available as the industry recover from severe drought in 2012.
December placements were 1.525 million head, down one percent from 1.537 million in December 2014, but topping analysts’ average forecast of 1.469 million.
The feedlot population as of Jan. 1 was 10.573 million head, nearly in line with 10.626 million a year ago. Analysts, on average, had forecast a drop of one percent.
December marketings rose one percent to 1.674 million head.
Analysts projected a 1.9 percent increase from last year.
“The shock placement-wise is that there was such huge closeout losses that people didn’t think that cattle feeders were going to replace these cattle, but they did,” said Allendale Inc. president Paul Georgy.
He pointed out that December placements fell to their lowest for the month since 1998.
Feedlots last month, on average, lost $473 per head, their 13th straight month of losses, as calculated by the Colorado-based Livestock Marketing Information Center (LMIC).
With the exception of the placement number, the data generally was close to average trade forecasts, said LMIC economist Jessica Sampson.
She noted that falling feeder cattle prices may have helped feedlots offset lower prices paid by packers.
“Feedlots were losing money, but they still needed those live animals,” said Sampson.
Analysts viewed USDA data as neutral to moderately bearish for Chicago Mercantile Exchange live cattle futures on Monday.
Friday’s cash market and wholesale beef prices, along with U.S. stock market direction, will influence futures more than the cattle on feed report, they said.
