CHICAGO, May 26 (Reuters) – Feedlots placed 11 percent more cattle on feed in April than a year earlier, the most for the month in 14 years, the U.S. Department of Agriculture reported May 26, beating average forecasts.
Feedlots were making money from selling slaughter weight cattle at strong prices and that allowed them to buy more calves for fattening.
The demand prompted ranchers to drive cattle into feedlots ahead of schedule.
Cattle that entered commercial feeding pens in April will start arriving at packing plants around late summer, which could help keep a lid on fed cattle and beef prices at that time, said analysts.
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“This report highlights the idea that we’re going to have a few extra cattle waiting for us,” said Allendale Inc chief strategist Rich Nelson.
Chicago Mercantile Exchange live cattle futures on May 26 slumped more than two percent, partly because of the larger-than-expected April placement, said analysts and traders.
The USDA pegged placements at 1.848 million head, up from 1.664 million in April 2016 and above the average forecast of 1.777 million. It was the most for the month since 1.870 million in 2003.
The feedlot cattle supply as of May 1 was at 10.998 million head, up two percent from 10.783 million a year ago. Analysts, on average, forecast a 0.8 percent gain.
Marketings were up three percent in April from a year ago, to 1.703 million head. Analysts expected a 1.8 percent increase.
