Cattle on Feed called neutral. Market waits for supply transition in the future.

Monthly Cattle on Feed, out after the close, would be called neutral. USDA's monthly feedlot report counted new inflows into feedlots, placements, at 1.656 million head. This was -5.8% from one year ago. That was next to the trade estimate of -6.1% from last year (ALDL -6.5%). These numbers finish out in October - December. Five of the past six months have noted below-last year placements. This April placement was the smallest in four years. The November 2023 - April 2024 placement period, determining August - December supply, has run -3.9% from one year ago. The supply drops ahead are mainly set for Q4.

Outflows of finished cattle in April, marketings, were reported by USDA at 1.872 million head. This was +10.1% from one year ago. The trade estimate was +9.8% year/year (ALDL +8.6%). As a reminder, this number looks much larger than actual steer and heifer slaughter was. 6.7% of that came from a simple difference in calendar days from April 2024 to April 2023. This did not fix our backlog in needed processing.

May 1 On Feed comes to 11.554 million head, -0.9% from last year. This was next to the -0.8% trade estimate. Now, let's go through the breakdown of these numbers. The computed measure of cattle on feed for +120 days, 4.715 million head, would be 5.5% over last year. These well-fed cattle make up 41% of the feedlot. Cattle on feed for -120 days as of May 1 falls to 6.839 million, -4.8% year/year. The fed cattle supply will transition to light -2% numbers in Q3 then -4% in Q4.

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