Feedlots placed more cattle than expected in lots for fattening last month, suggesting that beef supplies will continue to grow next year.
The U.S. Department of Agriculture said Friday that feedlots placed 2.39 million cattle on-feed in October, a 10% increase from a year earlier and above the 8% increase forecast by analysts.
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That was the highest figure for October since 2011, said Terry Reilly of Futures International, adding that the report was negative for cattle prices but positive for feed demand. Feedlots will need to secure more grain in order to fatten the extra livestock.
The total number of cattle on-feed on Nov. 1 of 11.3 million was 6% higher than a year earlier, in line with pre-report expectations. Cattle marketed, or sent to slaughterhouses, in October rose 6% year-over-year, also in line with expectations.
Market participants expected a limited reaction to the report when futures trading resumes on Monday. The USDA has frequently put its monthly cattle placement figures above analyst expectations, but traders are betting that demand will be strong enough to absorb the extra beef.
"It shouldn't lead to too much excitement out of the gate on Monday," said Tyler Keeling, a broker at Amarillo Brokerage in Texas.
Cattle futures for December closed 0.6% lower at $1.1885 a pound at the Chicago Mercantile Exchange before the cattle on-feed report was released Friday afternoon. Futures fell 1.4% over the week.
Much of the pressure on futures this week came from lower cash prices for physical cattle. Prices fell $4 to $5 from a week earlier.
Mr. Keeling said the U.S. Thanksgiving holiday should limit activity in the cattle market next week.
"All the traders will go home pretty quick, once they get the cash out the way," he said.
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(END) Dow Jones Newswires
November 17, 2017 16:27 ET (21:27 GMT)