Feedlot placements up, cattle on feed down, cattle prices hold firm.
Friday's USDA Cattle on Feed report showed feedlots placed 15% more cattle in February than last year. That's a ways above the average trade guess of up 10%.
Still, the on-feed inventory was not far out of line from average trade guesses.
Don't let the February 15% uptick in placements make you think the summer/fall beef supply will rise. The 1% lower March 1 cattle-on-feed inventory marks the 19th straight month the inventory was lower than the same month a year earlier. Summer cattle futures are near record high. They advanced further after cattle that will come back to the summer market were placed. Those forces should keep feedlots profitable.
Recent feedlot closeouts, said to be well north of $200/head, give feedlot operators a stash of cash to buy feeder cattle. Feedlot operators are perpetual optimists. Both factors entice feedlots to want to place more cattle.
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