October cattle closed sharply higher on the session yesterday and posted the highest close since August 16th. A poorly received weekly Jobless Claims number was thought to have attracted some liquidation selling early but the market surged higher to trade as much as 130 higher later on the day. Many traders anticipate strong packer demand and have priced-in cash prices of at least $116.00 this week, up $3.00 from last week. October cattle traded as high as 119.55 yesterday as the market remains very optimistic on demand. Beef prices, however, have been sluggish and there could be disappointment if cash prices do not reach expectations. Boxed beef cutout values were down 53 cents at mid-session yesterday and closed 56 cents lower at $179.82. This was down from $182.79 the prior week and the lowest beef market since August 12th. Average dressed steer weights for the week ending August 27th came in at 845 pounds, down from 849 pounds the previous week but still up from 842 pounds a year ago. Cash offers appear to be moving higher with the October futures rally but packer margins have weakened with lower beef price and if they pay up for live inventory, their margins may dip into the red. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 389,000 head, down from 511,000 head last week at this time and down from 397,000 head a year ago.