February cattle closed moderately higher on the session yesterday and managed to push to a five-session high. The market traded lower early in the session finding weakness from weaker hog prices and continued demand concerns. However, the weaker US dollar, higher beef prices at mid-session and ideas that the supply will tighten into next year were all seen as positive factor during Thursday's session. Cash cattle have not traded yet this week with packer bids at $117.00 and offers at $122.00-$125.00. The short-term focus of the market is on the USDA Cattle-on-Feed report for release after the close today and the macro economic impact of a slowing Europe and fears of a slowing China. Japan is considering relaxing beef import restrictions, which might boost exports in the longer-term if the rules are relaxed. For the report, traders see placements about unchanged from last year, with a range of 3% up or down. Marketings are expected to be down 1%-2% from last year and On-Feed supply is expected near 3.5%-4.0% above last year. Weekly U.S. beef export sales for the week ending December 8th came in at 10,000 metric tonnes, compared with the prior 4-week average of 11,750. Cumulative sales for 2011 have reached 835,500 metric tonnes, up 28.3% from last year's pace. The estimated cattle slaughter came in at 129,000 head yesterday. This brings the total for the week so far to 504,000 head, down from 519,000 head last week at this time and down from 509,000 head a year ago. Boxed beef cutout values were up 79 cents at mid-session yesterday and closed 12 cents higher at $188.84. This was up from $186.45 the prior week. Average dressed steer weights for the week ending December 3rd came in at 855 pounds, down from 856 pounds the previous week but up from last year. Beef production for the same week came in at 514.5 million pounds, down 2.87% over year ago.
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