* WHAT: USDA Cattle on Feed Report * WHEN: Friday at 2 p.m. CDT (1900 GMT * U.S. gov't shutdown could cancel Friday's report * Oct 1 feedlot cattle supply seen down 7.3 percent * Sept placements seen up 1.6 percent year-on-year * Sept marketings seen up 3.9 percent year-on-year By Theopolis Waters CHICAGO, Oct 16 (Reuters) - The number of cattle placed in U.S. feedlots likely rose last month as reduced corn costs allowed feedyards to purchase more young cattle for fattening, according to most analysts polled by Reuters. They said higher prices paid for cattle in September provided incentive for ranchers to move cattle to feeding pens. Some analysts, however, believe sufficient grazing pasture and fewer available feeder cattle dropped last month's placements below the September 2012 level. The U.S. Department of Agriculture's cattle-on-feed report, which is scheduled for 2 p.m CDT (1900 GMT) on Friday, likely will not be issued due to the U.S. government shutdown, analysts said. "Even if the government reopens, its going to take four to five days to get the wheels in motion again," said U.S. Commodities analyst Don Roose. Relying on historical cattle data analysts, on average, expected the report to show September placements at 101.6 percent of a year ago, or 2.036 million head. If accurate, it would be the second lowest placements for the month since USDA began the current data series in 1996. AFFORDABLE FEED IMPROVES FEEDLOT MARGINS Roose said feed costs continued to recede, which made it attractive for feedlots to bring in young cattle. On the other hand, the "shallow feeder cattle pool" eventually pushed those prices to record highs, partly offsetting the improvement in feedlot profits during September, he said. Last month, Chicago Board of Trade corn futures averaged $4.72 per bushel, which was down from $4.92 5/8 in August. The Denver-based Livestock Marketing Information Center (LMIC) calculated feedlots in September, on average, lost $34 per head on cattle sold to meat companies. That compares with a loss of $92 in August and extends their streak of losses to 29 months. "September and October are usually your biggest months for placements as cattle transition from pastures to feedlots as quality grass slowly deteriorates before winter," said University of Missouri livestock economist Ron Plain. He projected last month's placements up 2.3 percent from a year earlier. Conversely Rich Nelson, chief strategist with Allendale Inc, suspects September placements slipped 1.2 percent year-over-year because of comparisons made to a much-smaller placement result in September 2012. "DISSERVICE" TO TRADERS LMIC director Jim Robb declined to participate in this month's Reuters survey. He said to do so would be a "disservice" to traders and would send the wrong message to lawmakers who might conclude that the industry can do without the USDA reports. "Prior government shutdowns have always produced major reports, including the cattle-on-feed. Past government reports are the key inputs in doing the pre-report estimates," said Robb. Analysts, on average, expected the report to show the Oct 1 feedlot cattle supply at 92.7 percent of year ago, or 10.187 million head. Fewer cattle are in feedlots after multi-year droughts in the United States, drove feed costs to all-time highs last summer. Several years of high-priced feed contributed to the gradual decline in the U.S. herd to its smallest level in 61 years. USDA monthly cattle report is expected to show cattle marketings, or the number of animals sold to packers in September, at 1.660 million head, up 3.9 percent from a year earlier. There was one more week day to slaughter cattle last month than in September 2012 and less cattle are available than a year earlier, analysts said.