May 26, 2017 / 6:31 PM / 3 months ago

CORRECTED-U.S. April feedlot cattle placements jump to 14-year high

 (Corrects first paragraph to say "the most for the month in 14
years" instead of "the most in 14 years")
    * April placements up 11.0 pct vs year ago
    * May 1 feedlot cattle at 102.0 pct of year ago
    * Marketings in April up 3.0 pct vs year ago

    By Theopolis Waters
    CHICAGO, May 26 (Reuters) - Ranchers placed 11.0 percent
more cattle in feedlots in April than a year earlier, the most
for the month in 14 years, the U.S. Department of Agriculture
reported on Friday, beating average forecasts.
    Higher cattle prices paid by packers last month enhanced
profits for feedlots, allowing them to buy more less-costly
calves for fattening. The demand prompted ranchers to drive
cattle into feedlots ahead of schedule.
    Cattle that entered commercial feeding pens in April will
start arriving at packing plants around late summer, which could
help keep a lid on beef prices at that time, said analysts.
    On Friday Chicago Mercantile Exchange live cattle futures
       slumped more than 2 percent, partly because of the
larger-than-expected April placement, said analysts and traders.
    The USDA report showed placements at 1.848 million head, up
from 1.664 million in April 2016 and above the average forecast
of 1.777 million. It was the most for the month since 1.870
million in 2003.
    The government put the feedlot cattle supply as of May 1 at
10.998 million head, up 2.0 percent from 10.783 million a year
ago. Analysts, on average, forecast a 0.8 percent gain.
    USDA said the number of cattle sold to packers, or
marketings, were up 3.0 percent in April from a year ago, to
1.703 million head.
    Analysts had projected a 1.8 percent increase from 1.658
million last year.
    "This report highlights the idea that we're going to have a
few extra cattle waiting for us," said Allendale Inc chief
strategist Rich Nelson.
    The highest prices for cattle in more than a year, in some
parts of the U.S. Plains, have returned bullish enthusiasm to
feedlot operators, he said.
    Hopes of U.S. beef returning to China, and fallout over the
Brazilian beef scandal, contributed to that enthusiasm, said
Nelson.              
    Jim Robb, director of the Livestock Marketing Information
Center (LMIC), said feedlot profitability and the difference
between futures and cattle prices, or basis, combined to pull
more cattle into feedlots than some had anticipated.
    LMIC calculated that feedlots in April, on average, made a
profit of $190 per steer sold to meat companies. Last year in
April cattle feeders barely broke even, said Robb.
    "This is a dramatic turnaround in terms of feedlots ability
to buy animals to go into their feedyards," he said.

 (Reporting by Theopolis Waters; Editing by Richard Chang)
  

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