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Rabobank's second quarter global beef report identifies weather as the most disruptive influence on the US beef complex, with extreme drought across Southern Plains grazing regions forcing early calf placements. Cattle on feed was estimated at 11.5 million head as of May 1, 5% above last year.
Drought-forced placements have inflated feedlot numbers and risk bunched fed cattle marketings this summer, pressuring cash fed cattle prices. Continued drought could trigger liquidation and tighter supplies into 2019.
beefmagazine.comBurt RutherfordMay 30, 2018After 18 past bearish weather events, LCATTLE moved a median +0.1% over 5 sessions (56% higher; middle half -0.7% to +0.9%), and -0.1% over 20.
After 29 past bearish weather events, FCATTLE moved a median +0.5% over 5 sessions (62% higher; middle half -0.5% to +2.6%), and +2.4% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Southern Plains drought forcing early calf placements implies tighter future feeder supplies, a supportive supply factor, though the early placements would be bearish near term.
