The USDA Cattle on Feed report released Friday afternoon is slightly negative for the market outlook. Marketings were down 3.5% from the year-ago level, falling to the lowest level for the month of December since 1996. Prior to the report, analysts were looking for marketings to come in about steady to down only slightly from the year-earlier level.



Placements were up 2.7% from the year-earlier level. Placements were on the low side of pre-report estimates, but they were the highest in the current data series dating back 10 years. Similarly, the 11.8 million head January 1 feedlot inventory is the highest in the current data series. The inventory is up 4.5% from last year and is in line with the pre-report estimates. The report is fairly neutral so futures market reaction Monday should be limited. However, the data point to increasing supply pressure and lower cattle prices from late spring into summer.