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U.S. Sept cattle placements surge 'good news' for beef lovers
October 20, 2017 / 10:05 PM / a month ago

U.S. Sept cattle placements surge 'good news' for beef lovers

    * Sept. placements up 13.5 pct vs year ago
    * Oct. 1 feedlot cattle at 105.4 pct of year ago
    * Sept. marketing up 2.9 pct vs last year
    * Report bearish for CME live cattle futures

    By Theopolis Waters
    CHICAGO, Oct 20 (Reuters) - Ranchers in September drove 13.5
percent more cattle into U.S. feedlots than the same month a
year earlier, the U.S. Department of Agriculture reported on
Friday.
    The result topped analysts' average forecasts and hit its
highest level for the month in six years.
    "The good news for the consumer is we’ve got record supplies
of beef and pork going into the fourth quarter. And when we get
into the spring grilling season, we’re going to have big
supplies still," said U.S. Commodities President Don Roose.
    Some cattle ranchers and feedlots, or cattle feeders, rushed
livestock to market last month while capitalizing on affordable
feed, said analysts. And prices for animals at that time
appeared to reach a seasonal fall low.
    Furthermore cattle from the drought-stricken Northern Plains
landed in feedlots in Corn Belt states where many of them were
fattened and sold to packing plants.
    On Monday, Chicago Mercantile Exchange live cattle futures
       could open 0.500 to 1.000 cent per pound lower based on
Friday's bearish placement outcome, the analysts said. 
    USDA's report showed September placements at 2.150 million
head, up 13.5 percent from 1.895 million a year earlier and
above the average forecast of 2.046 million. 
    It was the largest September placement figure since 2.415
million in 2011, according to Allendale Inc. chief strategist
Rich Nelson.
    The government put the feedlot cattle supply as of Oct. 1 at
10.813 million head, up 5.4 percent from 10.256 million a year
ago. Analysts, on average, forecast a 4.6 percent increase.
    USDA said the number of cattle sold to packers, or
marketings, were up 2.9 percent in September from a year ago to
1.783 million head.
    Analysts had projected a gain of 2.6 percent from 1.732
million last year.
    Nelson said cattle feeders were enthusiastic after seeing
cattle prices last month carve out a low for the season.
    "Those cattle should come to market in March through early
August, which will curb some of that enthusiasm about the 2018 
cattle price picture," he said.
    Roose said low-priced feed, which reduced input costs for
cattle feeders, and improved cattle prices were the main driver
behind September's large placements. 
    "Feeder cattle prices caught fire and along with cheap corn,
guys were moving the cattle," said Roose.   

 (Reporting by Theopolis Waters in Chicago; Editing by Cynthia
Osterman)
  

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