CHICAGO, Ill. (Reuters) — The number of cattle placed in U.S. feedlots in September increased one percent from a year earlier, the U.S. Department of Agriculture said.
Analysts attributed the rise to lower-priced corn, which reduced the cost of fattening cattle in feedlots. Also, higher prices for slaughter-ready cattle improved margins and drew more animals into feedlots.
Analysts viewed the report as neutral to mildly bullish for Chicago Mercantile Exchange live cattle futures.
“There was not much difference between the estimates. It is pretty neutral for the market,” said Ron Plain, a University of Missouri livestock economist.
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The USDA showed September placements at 2.025 million head, up one percent from 2.004 million a year earlier. Analysts, on average, expected a 1.2 percent increase.
Although up from last year, September placements were the second lowest for the month since USDA began the current data series in 1996.
The placement data suggests the trend of low placements will continue into the first half of 2014, which should help support deferred CME live cattle futures.
There were 10.144 million head in U.S. feedlots Oct. 1, down eight percent from a year earlier. Analysts, on average, expected a 7.3 percent drop. The supply has been declining and is now at the lowest level for the month in 15 years.
The number of cattle marketed to packers in September was up six percent from a year earlier at 1.695 million head. Analysts had forecast a 4.1 percent rise.
Cattle are entering U.S. packing plants slightly thinner than a year ago as feedlots rush the animals to market to cash in on record-high prices and are no longer feeding them the growth promotant Zilmax, analysts and economists said.
The lighter cattle produce less beef at a time when there are fewer cattle going to slaughter. The combination of less beef and fewer cattle should mean record fed cattle and beef prices at least through the coming year, analysts said.
During the week of Oct. 5, the latest weight data from the USDA showed steer weights on a carcass basis at 875 pounds, down five lb. from the same period a year ago.
During that same period, heifers shed 11 lb. to 796 lb.
