CATTLE BEING PLACED ON FEED LIGHTER THAN NORMAL

  Most of the cattle now being placed on
  U.S. feedlots weigh less than normal and likely will remain on
  feed longer, spreading out marketings and supporting cattle
  prices through the summer because of reduced beef supply.
      The prospect of so many cattle remaining on feed for a
  longer time blunted the market impact of the high placements
  reported in the USDA's latest cattle on feed report, livestock
  analysts said.
      After the USDA released its report of cattle on feed in
  seven states as of March 1, cattle futures on the Chicago
  Mercantile Exchange yesterday rose sharply. The trade had
  expected deferred contracts to decline on the USDA report of a
  15 pct rise in cattle placements in February from a year ago.
      Although the heavy placements were expected, analysts noted
  reports that many cattle put on feed were relatively
  lightweight and said feedlot operators would feed the lighter
  cattle into the autumn, rather than market them during the
  summer as would be the case with the heavier cattle normally
  placed on feed.
      Although reports of actual cattle weights are difficult to
  obtain, industry sources in the West and Southwest acknowledge
  that lighter cattle are being put on feedlots in their areas.
      The increase in lighter-weight cattle entering feedlots,
  helps explain the jump in feedlot placements last month from
  February, 1986.
      University of Missouri Agricultural Economist Glenn Grimes
  said, "The probabilities are high that in order to place that
  many cattle on feed they (feedlot operators) had to go to
  lighter-weight cattle.
      The only statistics available are from some terminal
  markets which represent only a small percentage of the total
  cattle marketed. But at those markets, steers averaged 708 lbs
  in February compared with 718 lbs last year, Grimes said.
      Even if marketing of the lighter cattle is not delayed,
  Grimes said, beef supply likely will be reduced.
      If the average weight is down, and there is no price
  weakness to delay marketings, the cattle would be marketed at
  lighter weights, which could reduce the beef supply as much as
  three pct.
      Bruce Ginn, cattle analyst for The Helming Group (formerly
  LBAS), said the lighter cattle are being placed on feed mainly
  because of two factors: low grain prices and higher live cattle
  prices.
      Many farmers like to feed lighter weight cattle and grain
  supplies are large, he noted. Also, the higher live cattle
  prices have been encouraging early movement of cattle from
  wheat pasture onto feedlots, Ginn said.
      Other analysts also noted that cattle are coming off wheat
  pasture sooner than normal because of poor pasture conditions.
      Gary Chapmann, a cash livestock trader for Chapmann and
  Graham in Sioux City, Iowa said he believed the general trend
  is to lighter weight placements but pasture conditions in his
  area benefited from a dry, mild winter.
      To the south, however, he said the weather was wetter and
  some cattle are coming off pasture weighing 75 to 100 lbs less
  than normal after having gained only 75 lbs all winter.
  

