July 20, 2018 / 9:43 PM / a month ago

U.S. June feedlot cattle placements reach 12-year high

    * June placements up 1.3 pct vs year ago
    * July 1 feedlot cattle hits record high
    * Report neutral for CME live cattle futures
    * Bi-annual USDA data shows slower herd growth

    By Theopolis Waters
    CHICAGO, July 20 (Reuters) - Ranchers last month sent 1.3
percent more cattle to U.S. feedlots than a year ago, the U.S.
Department of Agriculture reported on Friday, making it the most
for the month since 2006, according to analysts.
    The July 1 cattle supply on feed was the most on record for
the period since USDA began tabulating the data in 1996.
    Analysts partly attributed last month's feedlot inflow to
continued dryness in the southern U.S. Plains along with severe
drought in the southwestern part of the United States.
    Most of the placement increase was driven by light-weight 
cattle, which in some measure is due to deteriorating pastures,
said MBS Research President Mike Sands. 
    Feedyards also sent cattle to market in a timely fashion to
avoid lower prices amid a projected supply build-up, which could
mean fewer cattle later this year, he said.
    Analysts called the report neutral for Chicago Mercantile
Exchange live cattle futures        on Monday, with traders
focusing more on near-term cattle prices and wholesale beef
values.
    USDA's report showed June placements at 1.793 million head,
compared with 1.770 million a year earlier, which was above the
average estimate of 1.781 million head. It was the highest
placement for the month since 1.946 million in 2006, said
Allendale Inc chief strategist Rich Nelson.
    The government put the feedlot cattle supply as of July 1 at
11.282 million head, up 4.3 percent from 10.821 million a year
ago. Analysts, on average, predicted a 4.0 percent increase.
    USDA said the number of cattle sold to packers, or
marketings, was up almost 1.0 percent in June from a year ago to
2.006 million head.
    Analysts had projected a 1.1 percent rise from 1.989 million
last year.
    "We are still seeing these cow/calf producers move some
heifers into the feedlots as a simple measure of trying to stop
expansion," said Nelson, citing another reason for last month's
placement increase.
    Friday's monthly cattle report included quarterly numbers
for heifers on feed as of July 1 at 4.154 million head, up from
3.857 million in July 2017.
    On Friday the government simultaneously issued the
semi-annual cattle inventory report. It showed the July 1 U.S.
cattle herd at 103.2 million head, up from 102.2 million a year
ago.
    "The category of beef heifers held back for replacement does
show that they (ranchers) are cutting back right now in terms of
holding back the cow herd," Nelson said.

 (Reporting by Theopolis Waters
Editing by Leslie Adler)
  
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