Cattle on Feed Preview     11/21  14:35

By ShayLe Stewart
DTN Livestock Analyst

                      USDA Actual   Average Estimate       Range

On Feed Nov. 1                           101.4%      98.2-102.5%
Placed in October                        112.2%      96.2-119.0%
Marketed in October                       99.6%      99.3-100.1%

November's Cattle on Feed report is expected to show a lofty 
placements number since the October report showed placements up 
a mere 2%.

USDA will release its Nov. 1 Cattle on Feed report at 2 p.m. CST 
on Friday. 

Analysts' projections for cattle placed on feed in October vary 
a baffling 22 percentage points. But the fact of the matter is 
that this comes as no surprise. Cattlemen knew that placements 
were going to be up because: 1) The fall run took its time 
heating up this year and more calves were traded in October than 
in late September; 2) Given the market uncertainly fueled by the 
Tyson Holcomb, Kansas, packing plant fire, cattlemen of all 
sectors were leery of the market's condition and held calves on 
grass for longer; and 3) Placement figures since June of 2019 
have been lower (June down 3%, July down 2%, August down 2%, 
September down 9% and October up 2%), and the market typically 
doesn't see a negative placement pattern like this, so, at some 
point, the cattle have to trade and be placed. It's obviously 
given analysts figures that those cattle finally traded hands in 
October.

But what kind of market impact will Friday's report have? The 
funny thing is is that everyone has known for some time now that 
this report would share lofty placement figures. If the industry 
wasn't current and was struggling to sell beef products, then a 
report like this would wreak havoc. But given that the world's 
supply of protein is off-kilter because of the outbreak of 
African swine fever in Asian countries and that the U.S. is 
currently processing cattle at a vigorous speed and able to sell 
that product off retail shelves at a rapid pace, this report 
shouldn't cripple the market, though it may play on the 
psychology of cattlemen.
 
The cattle market is already entering a correction mode from a 
near-two-month rally. This report may cause a strong downward 
trend in a couple of days after the report is released, but it 
shouldn't have a long-term effect. The market's downside play 
has been a long time coming.

ShayLe Stewart can be reached at shayle.stewart@dtn.com