USDA Oct. 1 Cattle on Feed Up 1%

OMAHA (DTN) -- Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.6 million head on Oct. 1, 2023. The inventory was 1% above Oct. 1, 2022, USDA NASS reported on Friday. This is the second-highest Oct. 1 inventory since the series began in 1996. The inventory included 6.95 million steers and steer calves, up slightly from the previous year. This group accounted for 60% of the total inventory.

Heifers and heifer calves accounted for 4.64 million head, up 1% from 2022.

Placements in feedlots during September totaled 2.21 million head, 6% above 2022. Net placements were 2.15 million head. During September, placements of cattle and calves weighing less than 600 pounds were 460,000 head, 600-699 pounds were 355,000 head, 700-799 pounds were 485,000 head, 800-899 pounds were 521,000 head, 900-999 pounds were 290,000 head, and 1,000 pounds and greater were 95,000 head.

Marketings of fed cattle during September totaled 1.66 million head, 11% below 2022.

Other disappearance totaled 57,000 head during September, 8% above 2022.

DTN ANALYSIS

"As expected over the last few days given the wide market shifts and variation in analyst cattle placement estimates, the biggest shift in the Oct. 1 USDA Cattle on Feed report was the cattle placements for the month of September," said DTN Contributing Analyst Rick Kment. "Cattle placements were well above not only the average pre-report estimate, but also above the high range of estimates, at 106% of 2022 levels. A total of 2.2 million head were placed in feedlots in September, creating additional concerns that the higher placement levels will further affect short-term price levels. September cattle placements are the highest monthly placements number since the November 2021 report.

"Cattle on feed totals were also bearish, based primarily on the increased placement levels and lower marketed numbers reported in the report. The total on-feed number of 101% is not in itself going to be a shock to the market, but the combination of factors will likely quickly tie to further market pressure early next week. The aggressive market pullback in both feeder cattle futures and live cattle futures over the last two trading sessions should curb long-term selling pressure. But given the entire weekend to marinate on the report, it is likely the market will take a bearish tone Monday morning.

"The number of marketed cattle was estimated to be significantly lower than year-ago levels, but with total marketings at 89% compared to the 90.4% in pre-report estimates, this will also limit short-term market support. Marketed cattle in September was the lowest level since the June 2020 report, creating concerns about the number of cattle needed to be sold and processed through the end of 2023."

	USDA Actual	Average Estimate	Range
On Feed Oct. 1	101%	99.7%	99.0-100.3%
Placed in September	106%	101.0%	95.9-104.8%
Marketed in September	89%	90.4%	89.5-91.5%