May 29 Weekly Update

5/29 – In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in April were 8.3% below a year ago, but that feedlots inventories at 11.6M head are still 5.1% higher than last year. Poor winter wheat grazing, due to drought in TX and OK, prompted herd liquidation in Jan/Feb – leaving fewer feeders available for placement in March/April. In its recent WASDE report, the USDA reduced its beef production forecast. Previously expected 7-8% increases were reduced to 5.4% for Q2 and 2.9% for Q3 2018. The USDA now is forecasting beef output to grow by 3.9% in 2018 and by just 1.8% in 2019. Seasonally, Memorial Day is in the review mirror, Father’s Day buying is already concluding, and July 4th will be mostly about burgers. Middle-meat prices are projected sharply lower in June, while beef 50s and 90s look to add another nickel each.