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December Cattle on Feed Report

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December Cattle on Feed: November Placements + 5%

  • On Friday, Dec. 20th, the USDA released their December Cattle on Feed report.
  • December 1 total cattle on feed was reported at 12.031 million head, +2.5% above 2018 and 8.3% higher than the five-year average.
  • The December 1 total on feed is the largest posted since 2011 and the third largest in the US.
  • Placements during November were above average expectations of +1.1% YoY. The bulk of the increase in placements versus year ago was in the calves or the lightest USDA reported weight category of under 600 pounds.
  • Placements weighing under 600 pounds were up 70.0 thousand head or 12.7% versus year ago levels.
  • Following October’s large placement total, the increase in November was expected to be minimal.
  • FBN’s Take On What It Means For The Farmer: We believe that the December Cattle on Feed report can be bearish for June cattle futures because of the growing supplies during the summer time period. From a feed grain perspective, we believe that the inventory and placement figures are bullish as greater supplies of cattle in the feedlot can be positive for corn demand.

China Reduces Import Tariffs On US Goods On Jan 1: Pork Included

  • On Jan 1, China will implement temporary import tariffs which are lower than the current most-favored-nation tariffs, on more than 850 products.
  • At the moment frozen pork and frozen avocados are the only agricultural commodities.
  • The tariff rate for frozen pork will be cut to 8% from 12%.
  • According to Chinese Customs, the tariff changes were made to “increase imports of products facing a relative domestic shortage, or foreign specialty goods for everyday consumption.”
  • China imported 229,707 tonnes of pork in November, up more than 150% from 2018.
  • Pork imports for the first 11 months of 2019 are 1.733 million tonnes, up 58% from 2018.
  • FBN’s Take On What It Means For The Farmer: We believe that China’s reducing the import tariff is a positive step forward for the U.S. pork export program and the U.S. pork producer. At FBN, we are concerned about the lack of agricultural commodities mentioned. Aside of U.S. soybeans we would like clarity about what other agricultural goods are included.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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