Chart of the Week
Dr. Curt Lacy (UGA)
On April 21, USDA released its monthly Cattle on Feed (COF) report. While the report indicated a larger number of COF compared to a year ago, there is more to the story than many might think.
For starters, the year over year increase really illustrates the impacts of the drought in Oklahoma and Texas as numbers of stockers and feeders were moved from pastures to feedlots. Also of import are several facts that should be supportive of feeder cattle prices: total cattle on feeder were LESS than trade expectations, cattle placed in March were LESS than traders expected and cattle marketed in March were MORE than pre-report expectations.
All of these pieces of data serve only to underscore how tight supplies of feeder cattle are. Of course, there is still uncertainty about the impacts the impacts of higher beef prices at retail and high-priced corn on feeder cattle demand. Absent these concerns, fundamentals for feeder cattle prices remain bullish.
