USDA reports May placements and the total number of cattle on feed were above pre-report estimates while marketings fell below all expectations.
Placements last month were up 15% from the historic low set May 2011 at 20.9 million head as drought conditions persist across the U.S. Plains. The biggest year to year increases were Arizona and Colorado, both up 29%, Iowa, which was up 26%, and Nebraska, with a 35% rise. Before the report, the average estimate, via Dow Jones Newswires, was for a 14.2% increase, with estimates ranging from a 0.6% decline to an 18.6% rise.
Marketings were only up 1% on the year, traders were expecting a 5% increase, at 2.02 million head as packers slowed down production. Marketings were down in 7 of the 11 major cattle states including Iowa and South Dakota. Expectations ranged from 2.7% to 6.6%.
The total number of cattle on feed in the U.S. as of June 1, 2012 was 11.1 million head, 2% more than on June 1, 2011. Pre-report projections ran from down 1.2% to up 1.9%, with the average calling for an increase of 0.7%.
Other disappearances during May were up 23% on the year at 100,000 head.
Allendale’s David Kohli calls the numbers bearish for futures and cash trade.