Mike Pearson tells us how the USDA cattle on feed report released last week might tell the future of the cattle markets.

For the past three months, feeder cattle and live cattle have moved back to record high prices which has been driven by record level of cattle.

The Cattle on Feed report released last week shows in the March update that traders were surprised to find a larger number of calves moving into the feedlot than anticipated.

The cattle on feed report tracks 3 categories: Placements, marketing and total cattle on feed.

For total cattle on feed, the report showed 11.8 million head of cattle which was expected.

Placements: The report could keep cattle bulls in the pen briefly. The USDA reported 10 percent more feeder calves in the feedlots than in February 2023.

Analysts had been expecting a higher placement figure this month but extreme cold and snow in January likely delayed movement to the countryside until February. Plus, 2024 was a leap years so February had one more marketing day but none of the marketers expected a figure quite this high. In fact, February placement of 1.819 million head reported -- a record high since record keeping began in 1996.

Traders are expected to act bearishly in the short term, the dynamics of tight supply will provide support.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness.