CME: overall COF report in range of pre-report estimates

 Overall the report was in the range of the pre-report estimates (for details see last Thursday’s Daily Livestock Report). The on-feed count as of 1 February was up 2.2 percent year-over-year (slightly below the average of the pre-report estimates).

Head marketed during January was 1.1 percent compared to a year earlier. The number of cattle placed into feedlots was in the lower end of the pre-report range (down 0.6 percent, while most analysts were up slightly year-over-year).

Pragmatically, the report was neutral compared to pre-report estimates. Price movements in Live Cattle futures contracts early this week won’t be attributable to the NASS report. Last week, all the 2020 Live Cattle Futures contracts declined each trading day (e.g., June went from a closing price on Tuesday of $112.20 per cwt. to $110.28 on Friday).

Looking at graphics of the report’s results provides a useful reminder of the feedlot conditions faced a year ago, especially in Nebraska, Kansas, and Iowa. Last year’s winter conditions and very muddy feedlots depressed animal performance

beginning in the fall of 2019 and continued into the spring of 2019.

Those conditions lengthened days on feed required for animals to reach harvest weight. The graphic we refer to is the number of cattle on-feed for over 120 days, which shows a year-over-year decline, even though the total count as of February 1 was above 2019’s.

At the end of this page is production and price summary of weekly data published by USDA’s Agricultural Marketing Service (AMS) (Market News Division), note that the data are preliminary. In the cattle complex, we point out that week-over-week, the live fed steer price (5-market average) was slightly higher (up 0.7 percent), but was down significantly year-over-year (lower by 5.2 percent).

At Oklahoma City, the feeder steer price (600– to 700- pounds) came in at $156.17 per cwt., which was an increase both week-over-week (up 4.2 percent) and year-over-year (rising 2.2 percent). The weekly average Choice beef cutout (wholesale carcass equivalent) value slipped for the week by 0.4 percent. That value compared to a year ago was down by 5.5 percent. The cutout should begin its normal spring rally soon, maybe even this week.

You can view the full US Cattle on Feed report by clicking here.