The monthly USDA Cattle on Feed report released after the close Friday appears slightly positive for the cattle futures market. November marketings were up 6 percent from the year-ago level, a couple points above expectations. Placements were down 9 percent and in line with trade estimates. The December 1 feedlot inventory totaled 11.973 million head, up 2 percent from last year and also in line with expectations. On the surface, the strong marketings suggest that the report should be a bit positive for the December and February futures but with those contracts carrying substantial premiums to the cash market, we don't expect much follow through to the upside.

The cash market is not well established through early afternoon Friday. We would look for cattle to trade around $86 in the southern Plains. A moderate volume has traded at $85 to $85.50 in Nebraska, steady to a dollar higher. February futures are still solidly in the broad trading range bounded by $88 and $91. There is nothing on the immediate horizon to push us out of that range. April faces stiff chart resistance around $92