Compared to pre-release estimates, USDA’s monthly cattle on feed report carried a neutral to bullish tone. The total count was 10.7 million cattle on feed, 1% more than a year ago. The bullish note was placements during December were just 1.54 million head, down 8% from a year ago, and 3.4% below what analysts expected. December marketings were slightly negative, totaling 1.66 million head, down 5% from the previous year, and 0.5% below expectations.
While the placement numbers were positive, both cash and futures prices have come under extreme pressure the past few weeks, and few analysts expect the COF numbers will provide an immediate turnaround.
However, analysts believe the report could provide some short-covering for the market on Monday, and given the sharply oversold condition of live and feeder cattle futures, traders could use the report as a "reason" to stop aggressively selling futures.
The inventory included 6.94 million steers and steer calves, up 2% from 2014, and that group accounts for 65% of the total inventory. Heifers and heifer calves account for 3.67 million head, down 2% from last year.
Live cattle traded mostly $4 lower at $160 per cwt. with a few up to $162 per cwt. Cattle on a dressed basis sold at $256 to $257 per cwt. Feeder cattle traded $3 to $10 lower.