A.G. EDWARDS & SONS, INC.
One North Jefferson, St. Louis, Missouri
314-955-3050
(March 23, 2000) CATTLE: The March 17 Cattle on Feed report showed producers in the seven major cattle-feeding states marketed 12% more head in February than last year. Leap day added an extra 24 hours to move cattle, but feedlot operators were obviously more aggressive sellers last month. The chart compares early 2000 marketings to 1999 and the five-year average. Given that February feedlot placements and the March 1 feedlot population set new records (as they have done routinely in recent months), producers probably need to keep marketing cattle at a record rate as well. Otherwise, beef fabricated from large numbers of heavy cattle could swamp demand this summer.
The placement statistics from the Cattle on Feed report made the need for urgent marketings more obvious. The number of steers and heifers entering feedlots topped year-ago levels for the seventh consecutive month, and set a record for the fourth time in the last six months. Moreover, the number of steers weighing over 800 pounds placed during February topped the comparable 1999 figure by 22.8%. Those cattle will probably be ready for slaughter in June, thereby exacerbating sales of calves placed on feed during late fall and early winter.
The seasonal tendency for cattle market strength during March and April seems to be holding. However, we view the May-June outlook as much less promising. We remain short June cattle and hold the October/June cattle spread.
Dan Vaught