April 21, 2017 / 9:14 PM / 4 months ago

U.S. March feedlot cattle placements carve new monthly high

    * March placements up 11.0 pct vs year ago
    * April 1 feedlot cattle at 100.0 pct of year ago
    * Marketings in March up 10.0 pct vs year ago
    * Report called mildly bearish for CME live cattle futures

    By Theopolis Waters
    CHICAGO, April 21 (Reuters) - U.S. cattle ranchers in March
placed 11.0 percent more cattle into feedlots than a year ago,
the U.S. Department of Agriculture reported on Friday, which
topped analysts' forecast and notched a record high for the
month.
    In March packing plants paid feedyards more money for
cattle, which enhanced feedlot profits enough for them to buy
more calves for fattening.
    Ranchers moved animals to feedlots as quickly as possible to
take advantage of higher cattle prices, while avoiding what
could be lower returns later based on deferred-month Chicago
Mercantile Exchange live cattle futures        .
    Cattle driven into feedyards in March may begin arriving at
meat packing plants in September, which could mean $111 to $112
per hundredweight (cwt) cattle prices then, said Allendale Inc
chief strategist Rich Nelson.
    How beef prices will respond during that period will largely
depend on demand and competition from increased pork supplies,
analysts said.
    USDA's report showed March placements at 2.102 million head.
That was up 11.0 percent from 1.892 million last year and bested
the average forecast of 2.015 million. It was the most since
USDA began tabulating the data in 1996. 
    The government put the feedlot cattle supply as of April 1
at 10.904 million head, up from 10.853 million a year ago.
Analysts, on average, forecast a 0.3 percent decrease.
    The government said the number of cattle sold to packers, or
marketings, grew 10.0 percent in March from a year ago, to 1.914
million head. 
    Analysts had projected a 9.4 percent rise from 1.911 million
last year.
    Record-high March placements reflect the feedlots' return to
profitability after cattle sold to packers $6 per cwt higher
than in February, Nelson said.
    U.S. Commodities analyst Don Roose described last month's
larger-than-anticipated cattle placement result as "a perfect
storm" of good U.S. beef exports, strong cattle prices and tight
supplies in parts of the Plains based on reduced animal weights.
    "What was expected to be 7 percent more cattle than a year
ago through the summer, may turn out to be around 3 more than a
year ago because the tonnage isn't there," Roose said.
    Analysts said CME live cattle futures        on Monday might
open steady to moderately lower, rather than down sharply, as a
result of Friday's report.
    "I think traders come Monday will be looking at beef demand
for spring grilling and cattle prices next week based on these
tight cattle numbers," Roose said.

 (Editing by Leslie Adler)
  

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