An Ohio man was being held on suspicion that he killed a woman whose beaten body was found hanging from a fence in what neighbours and workers first thought might be a graphic Halloween display, authorities said on Friday.

Donnie Cochenour was arrested on Tuesday, his 27th birthday, hours after the body of Rebecca Cade, 31, was found suspended on a fence near a utility company building, authorities said.

"Her sweatshirt sleeve was caught in the upper tines of the fence," Ross County Prosecutor Matthew Schmidt said in a telephone interview. "And she was suspended from one arm dangling on the fence."

Cincinnati television station WKRC reported that neighbors and construction workers thought at first that her body was a dummy in a Halloween display.

Cochenour and Cade, who had been beaten, are both from Chillicothe and the killing was "an isolated incident" between people who knew each other, Schmidt said. A bloody rock found near Cade’s body is likely the murder weapon, he said.

Schmidt said the case would be presented to a grand jury, possibly as soon as next Friday. He said it was unlikely prosecutors would seek the death penalty, but had not ruled out the possibility.

Schmidt said Cade’s death was not connected to recent high profile cases involving dead or missing women from the southern Ohio town.