December 27

12/27 - In Friday’s (pre-holiday) cattle report, the USDA said feedlot inventories totaled 11.67M head on Dec 1, down 2.6% from a year ago. New placements onto feedlots in Nov were down 2.1%. Meanwhile, beef demand remained strong with cattle marketings up 1.2% from a year ago in Nov. That combination (and trend) of smaller on-feed supplies, lighter placements, and strong marketings should be bullish for cattle prices. CME cattle futures set fresh 7-year highs, closing at $156.90/cwt on Friday (12/23). Forward contracts for 2023 are averaging $160.05. In Dec’s WASDE, the USDA forecast 2023 cattle prices to average $156.00/cwt, up 8.2% from $144.15 for 2022. The USDA is also projecting a liquidation-driven 1.7% increase in beef output for 2022, followed by a huge 7.5% drop in production in 2023. Beef supplies will be depressed at least through 2025.