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U.S. Jan feedlot cattle placements notch three-year high
February 24, 2017 / 10:31 PM / 10 months ago

U.S. Jan feedlot cattle placements notch three-year high

    * January placements up 11.1 pct vs year ago
    * Feb. 1 feedlot cattle at 101.0 pct of year ago
    * Marketings in January up 10.0 pct vs year ago
    * Report called neutral for CME live cattle futures

    By Theopolis Waters
    CHICAGO, Feb 24 (Reuters) - The number of cattle placed into
U.S. feedlots in January rose 11.0 percent from a year earlier,
the U.S. Department of Agriculture reported on Friday, the
largest number in three years and nearly matching analysts'
average forecasts.
    Positive January profits for feedlots allowed them to buy
more younger cattle for fattening on their way to packers, said
analysts.
    Periods of low cattle prices resulted in an increasing
number of heifers landing in feedlots instead of ranchers
retaining them to grow their herds.
    Cattle placed in feedyards last month should come to market
beginning in July, which could mean weaker cattle prices this
summer, according to analysts.
    USDA's report showed January placements at 1.981 million
head, up from 1.779 million last year and marginally higher than
analysts' average forecast of 1.977 million. It was the third
largest for that month since 2.014 million head in January 2014.
    The government put the feedlot cattle supply as of Feb. 1 at
10.782 million head, up 1 percent from 10.709 million a year
ago. Analysts, on average, had forecast a 0.7 percent gain.
    The government said the number of cattle sold to packers, or
marketings, grew 10.0 percent in January from a year earlier, to
1.751 million head.
    Analysts had projected a 9.8 percent rise from 1.589 million
last year.
    Friday's report was unsurprising because it was close to 
pre-report estimates, said Allendale Inc chief strategist Rich
Nelson.
    He said January was the third month in a row that placements
had risen by more than 10 percent, due to smaller September and
October placements and lower cattle prices for cow/calf
operators, causing some of them to not expand their herds.
    "This (report) will likely confirm futures expectations of
lower cattle prices this summer," Nelson said. 
    However, he said, recent monthly placement increases could
result in "less threatening" cattle supplies in October and
November.
    Jim Robb, Livestock Marketing Information Center director,
called the report "a non-event" other than the revamped weight
class category.
    Feedlots in January turned a profit for the first time since
April 2016, said Robb. "When cattle feeders are making money, it
is the added incentive for them to place cattle." 
    Analysts called the report neutral for Monday's CME live
cattle        market that on Friday tumbled in anticipation of a
bigger placement outcome.
    Futures should rebound slightly on Monday because the
January result was "not a horrible placement number," said
Nelson.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
  

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