Friday afternoon’s USDA Cattle-on-Feed Report should be neutral for cattle prices as it confirmed trade expectations for a large jump in June feedlot placements over last year and a larger July 1 feedlot inventory.

USDA pegged June feedlot placements at 117% of a year earlier compared with trade estimates averaging 120.3% in a range from 115%-128%.

USDA’s estimated the number of cattle on feed as of July 1 at 103.3% of a year earlier, dead on the average of trade estimates, which ranged from 102.5-104.5% of a year earlier.

June feedlot marketings were pegged at 100.4% of a year earlier against pre-report estimates of averaging 101.7% of a year earlier in a range from 99.2% to 103.4%.

June feedlot placements were expected to be up sharply from last year in part because placements were so low last year. At 1.391 million head of cattle, the June 2009 placements were the lowest in 13 years.

June placements were the largest in three years, but were slightly below the five-year average for the month. In actual numbers, June placements of 1.628 million head were up 135,000 head from a year earlier.

The number of cattle weighing less than 600 pounds that were placed on feed during June was up nearly 40% from a year earlier, which could put some pressure on December futures.

Even though the July 1 feedlot inventory was up 3.3% from last year, cattle supplies are relatively tight from a historical perspective as the July 1, 2009 inventory was the smallest in nine years.

In terms of actual numbers, at 10.070 million head, the July 1 feedlot inventory was 318,000 head larger than a year earlier, but was still 340,000 head below the five-year average for the date.

June marketings were slightly disappointing because the month held an extra marketing day this year compared with last year.

However, there is no indication of any back up in feedlot marketings with live cattle prices moving higher the past three weeks and cattle weights continuing to run below a year earlier.