By Theopolis Waters
CHICAGO, Jan 23 (Reuters) – The number of cattle placed in U.S. feedlots in December 2014 fell versus last year, a government report showed on Friday, but the decline was more than was expected, said analysts.
Analysts said traders may view this as neutral to mildly bullish for Chicago Mercantile Exchange live cattle futures on Monday.
But the recent liquidation of positions by funds out of live cattle futures may continue to have more influence on the market than Friday’s cattle report, said Dan Vaught, an economist with Doane Advisory Services.
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The U.S. Department of Agriculture report said feedyards bought fewer calves for fattening, noting that expensive feed and pricey calves wore down margins.
Ranchers held back heifers to rebuild the U.S. cattle herd, now at a 63-year low after several years of drought hurt crops, analysts said.
The report showed December placements at 1.544 million head. It was down eight percent from 1.679 million last year.
Analysts, on average, had expected a 4.1 percent December placement decrease.
USDA put the feedlot cattle supply as of Jan. 1 at 10.690 million head, or up one percent from 10.590 million a year ago. Analysts, on average, forecast an 1.6 percent increase.
The government said the number of cattle sold to packers, or marketings, was down five percent in December from a year ago, to 1.655 million head.
Analysts projected a drop of 4.9 percent from 1.736 million last year because of one more day to market cattle last month than a year ago.
