Cattle placements into U.S. feedlots last month rose 5.0 percent from March 2015 but were the smallest for the month in five years, according to a government report on Friday, and less than average industry forecasts.

Analysts attributed the unexpectedly slower placement pace to an improvement in feedyard margins, which have been negative since December 2014.

The U.S. Department of Agriculture confirmed the uptrend in March placements of cattle weighing over 800 lbs, many of which were left out on healthy grazing pastures as feedlots and ranchers struggled with reduced livestock prices.

Cattle that entered feedlots in March will begin arriving at packing plants around August, analysts said.

Friday's USDA report showed March placements at 1.892 million head, up 5.0 percent from 1.809 million last year, and below analysts' average forecast of 1.925 million. It was the lowest March placement since the 1.904 million reported in 2011.

The USDA put the feedlot cattle supply as of April 1 at 10.853 million head, above the 10.797 million a year ago and nearly matching analysts' average forecast.

The government said the number of cattle sold to packers, or marketings, was 1.747 million head in March, up 7.0 percent from a year ago.

Analysts had projected a 6.1 percent increase from 1.631 million last year.

Problematic feedlot margins and the lingering impact of historic losses in the cattle industry resulted in the modest placement shortfall relative to trade expectations, said Rich Nelson, chief strategist for Allendale Inc.

Nelson said he viewed the March placements as supportive for Chicago Mercantile Exchange live cattle futures on Monday, but cautioned that the heavyweight cattle category and this week's unexpectedly bigger cattle slaughter are bearish actors.

Jim Robb, director of the Livestock Marketing Information Center, said that given the on-feed inventory result, if futures are mostly basing their price forecast on supply they are looking at much-larger numbers than what the report implies.

Live cattle futures tumbled more than 5 percent this week in anticipation of increased cattle supplies later this year.

Friday's USDA report included the number of heifers on feed as of April 1 at 3.5 million head, up 150,000 head from a year ago, which partly reflects the rate of herd expansion.

"To date, herd growth is about at the same pace as last year, but will probably slow down through the balance of this year as more heifers come on feed," Robb said.