USDA Cattle on Feed Report Preview

OMAHA (DTN) -- Friday's release of the Jan. 1 USDA Cattle on Feed report will continue to be one of the main focuses of the cattle market over the next couple of days. Analysts are looking for a boost in on-feed numbers from a year ago, moderately lower cattle placements and slightly lower marketing numbers through December.

Overall, the average of analysts' estimates for Cattle on Feed at the beginning of the year is pegged at 102.2% of a year ago. This would put overall cattle on feed numbers for Jan. 1 at 11.94 million head. Although this is well above the 11.6 million head seen in January 2023, on-feed numbers below 12 million head would be a reduction from the December report total. If overall on-feed numbers fall below 12 million head, as expected, this would indicate that the largest peak of cattle inventory levels for the year has been seen, helping to solidify market support moving forward as the industry continues to look toward tighter supplies in the next several months.

Cattle placement numbers have been the focus of the Cattle on Feed report over the past several months, and anticipation for this month's report is no different. Although analysts expect lower placements overall from a year ago, the question of just how much lower will heavily affect the market over the next several days. The market estimate of 95.4% placement levels would put cattle placement numbers at 1.72 million head, which would be the lowest level since the August report. But more importantly, placements at this level would confirm that the placement peak for the marketing year has since passed, creating expectations of more typical spring placement levels in the months to come.

The cattle marketed segment of the report typically gets the least attention, but with an expected 99.2% of year-ago marketings, this is the largest percentage expectation since June but would still be slightly lower than marketings seen in November.

Given the expected on-feed, placement and marketing estimates, the report appears to be viewed as generally neutral, as these current numbers are likely well factored into current market prices. But even slight deviations from these estimates in either direction could create some moderate market shifts in either direction early next week once traders can trade the results of Friday afternoon's report.

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USDA will release its Jan. 1 Cattle on Feed report at 2 p.m. CST on Friday.

	USDA Actual	Average Estimate	Range
On Feed Jan. 1		102.2%	101.4-102.5%
Placed in December		95.4%	91.5-98.0%
Marketed in December		99.2%	98.2-100.7%

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