The supply of cattle into U.S. feedlots slowed in July from the previous month, according to federal data.
Some 1.6 million head of cattle were placed into feedlots in July, up 3% from a year earlier, according to the U.S. Department of Agriculture. That was below average pre-report estimates of 6%, however, and well below the rate of recent months. Cattle placements increased 16% in June from a year earlier.
"We are seeing maybe a change now in the supply flow of new calves and feeders entering the nation's feedlots," said Rich Nelson, chief strategist at brokerage Allendale Inc. in McHenry, Ill.
That could mean a slowdown in the slaughter rate of fattened cattle once meatpackers have worked through current supplies, according to Mr. Nelson. "For the 2018 period, perhaps there is now a new conversation," he said.
The total number of cattle being fattened as of August 1 was at 10.6 million head, up 4% from a year earlier, according to the USDA. Cattle marketed, or sent to slaughterhouses, in July rose to 1.8 million head, up 4% from 2016.
Large on-feed numbers have added to cattle supply, with slaughter numbers and meat production mostly rising through the summer even as demand eased. Meatpackers slaughtered an estimated 639,000 head and produced 520.4 million pounds of beef this week, while average cattle weights also rose--adding to the surplus and pressuring prices.
Cattle futures have slid around 20% since an early June peak, with most-active October futures at the Chicago Mercantile Exchange closing at $1.06925 a pound on Friday before the report. Cash-market rates have also trended lower.
Hog prices, meanwhile, fell on Friday. CME October lean hog futures fell 1.1% to 63.075 cents a pound, pressured by lower cash and pork prices.
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(END) Dow Jones Newswires
August 25, 2017 16:32 ET (20:32 GMT)