The cattle on feed report will likely be viewed as somewhat bearish for the late spring and early summer market. Total on feed supplies were reported to be 11.517 million head, 4.6% higher than the previous year. Pre-report estimates on average expected the total inventory to be 4.2% higher than a year ago.

Feedlot placements were 1.795 million head, 16.1% higher than a year ago and ahead of analysts estimates which on average were looking for a 13.7% increase. The rise in placements will likely catch some people by surprise and be viewed as quite bearish going forward. But as we noted in our report on Friday, keep in mind that we are comparing to one of the lowest December placements on record. Also, it appears that feedlots have been pulling some feeders forward, in part because wheat grazing has been so poor. Total feeder supplies are still very tight and we will have the smallest calf crop in the last fifty years this spring.

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