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USDA's bearish cattle data to be digested quickly, analysts say

With record high feeder cattle population figures for March and more than expected cattle marketed in February, the U.S. cattle market was dealt more negative news on Friday.

In its monthly report, USDA estimated that on March 1 the cattle on feed population was 8% above year ago totals.

Dan Vaught, AG Edwards analyst, said the data is bearish initially, but the market could swallow the news quickly.
"Overall it fits the bearish tone of the market. That is a record for March, but it also matches the forecast of the analyst's pre-report range," Vaught said.

USDA's February cattle placements at 5% above of a year ago came in at the high end of trade estimates.
"This suggests the placements for this summer will remain strong, all the way out through August," Vaught said.

The total number of cattle marketed in February was 1% below a year ago at 1.55 million head. However, that figure topped the average trade estimates.

"This might otherwise be viewed as somewhat supportive for the nearby April futures contract. But, given the overall bearish tone to the market I doubt it will have much impact."

Overall, traders on Monday are expected to be focused on the wholesale meat and cash markets for market direction.

Paul Hicks, market analyst, Producers Trading Co., said the Friday
report may already be built into the market, according to the Dow Jones newswire.
"Initially, you'd look at as a little bearish, with placements on the top end
of the estimates, but prices have broken hard coming into it, and they've
already got futures at a little discount. We ought to go lower, but we don't know
how much is built in."

Mike Leheska, analyst/broker, Amarillo Brokerage, told the Dow Jones newswire steady for nearby futures contracts.
"To me there is not a whole lot to read into the data, but it is one more
month with placements bigger than expectations, and it adds to the already
significant amount of cattle coming off feed in the next five months.

I call the report steady for the front months and 10 to 20 points lower in
the back end, with the most significant feature for next week being the amount
of fund selling in reaction to the very light slaughter total this week."

Bryan Doherty, senior market advisor with the Stewart-Peterson Group expected the bearish data, according to the Dow Jones newswire.
"Placements, at 105, reflect poor pasture conditions and aren't surprising to
me. Marketings, at 99%, are neutral. Summer months could see pressure, and this
could keep them from rallying."

Bob Anderson, livestock analyst, Commodity Services Inc., told the Dow Jones newswire that he agreed the report was bearish.
"It's bearish in all categories. Lower marketings and higher placements are
bad, and anyone who's trying to soften these numbers is whistling Dixie."

With record high feeder cattle population figures for March and more than expected cattle marketed in February, the U.S. cattle market was dealt more negative news on Friday.

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