I got to level 2 tech and had my villager pick up the cauldron. But I made the mistake of not watching where he put it. I know the location will probably seem really obvious once I find out. Can somebody please help me out?

It stands out well. It is not hidden!! So just look around the island, you'll see it.

So I quit the game and then restarted. Turns out the cauldron was back in the wood pile again even though I already took it out. Must have been a glitch or something.

If they drop it 'en route' it will go back to the woodpile after a restart.