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U.S. May feedlot cattle placements reach 10-year monthly high
June 23, 2017 / 9:33 PM / in 6 months

U.S. May feedlot cattle placements reach 10-year monthly high

    * May placements up 12.0 pct vs year ago
    * June 1 feedlot cattle at 103.0 pct of year ago
    * Marketings in May up 9.0 pct vs year ago
    * Report mildly bearish for CME live cattle futures

    By Theopolis Waters
    CHICAGO, June 23 (Reuters) - U.S. ranchers during May drove
12.0 percent more cattle into feedlots than a year earlier, the
most for the month in a decade, the U.S. Department of
Agriculture reported on Friday, topping average predictions.
    Higher cattle prices paid by packers last month generated
more profits for feedlot operators, allowing them to buy more
calves for fattening.
    Cattle that entered feedyards last month will be ready for
processing beginning around October, analysts said.
    On Monday, Chicago Mercantile Exchange live cattle futures
       may see a mildly bearish response to Friday's report
because placements were not as high as some investors had
anticipated, said analysts.
    Market participants will mainly focus on next week's cattle
and wholesale beef prices, they said, after both declined this
week.
    USDA's report showed May placements at 2.119 million head,
up from 1.889 million a year earlier and above the average
forecast of 2.085 million. It was the most for the month since
2.159 million in 2007.
    The government put the feedlot cattle supply as of June 1 at
11.096 million head, up 3.0 percent from 10.804 million a year
ago. Analysts, on average, forecast a 2.4 percent gain.
    USDA said the number of cattle sold to packers, or
marketings, were up 9.0 percent in May from a year ago, to 1.951
million head.
    Analysts had projected an increase of 8.5 percent from 1.794
million last year.
    "It's all about the economics of cattle feeding returns near
unprecedented levels that continued to pull cattle into
feedyards aggressively," said Livestock Marketing Information
Center (LMIC) director Jim Robb.
    LMIC calculated that feedlots in May, on average, made a
profit of $262 per steer sold to meat companies, which is "in
spitting distance" of the October 2003 record of about $269,
said Robb.
    U.S. Commodities President Don Roose said that after a
period of monetary losses, producers began rushing cattle to
feedlots "when they saw a light at the end of the tunnel
profit-wise."
    Reasonably-priced feed contributed to reduced input costs
for cattle feeders, which has helped support their margins, he
said.
    Roose noted that states in the Corn Belt led the way in
terms of placements, which he partly attributed to animals that
were displaced by drought conditions in the northern U.S.
Plains.

 (Reporting by Theopolis Waters, editing by G Crosse)
  

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