June 24

6/24 - In Friday’s cattle report, the USDA said feedlot inventories on June 1st were 11.58M head, down 0.1% from a year ago. New placements onto feedlots in May were up 4.3%, and marketings up 0.2%. The increase in placements was unexpected and should be bearish for cattle prices. Additionally, steer carcass weights were up 3.8% in May from a year ago. In June’s WASDE, the USDA projected beef output declines of 1.4% in 2024 and 4.6% in 2025. Look for USDA to adjust those declines lower, as weight gains partially offset lower herd numbers. After averaging $179.58/cwt in May, cattle futures closed at $187.60 on Friday. Second-half 2024 futures are averaging $184.38; first-half 2025 are $188.05. USDA says cattle prices will average a record-high $189.00/cwt in 2025, up from a projected $184.01 in 2024. But if weight gains continue, these numbers should come off a bit – albeit remain historically high.