April cattle closed 125 higher on the session Friday while gaining 410 points for the week, with many traders pointing towards news that cash cattle in Texas traded $5.00 higher for the week as a key supportive factor. This helped lift the market up to new contract highs, as a continuing optimistic outlook for the US economy and ideas that cash cattle would trade higher may have helped to support prices. Some traders have pointed towards a more positive tone for demand recently, while other traders are forecasting that consumers may soon have to decide between higher priced beef or filling up their car's gas tank with $4.00 gasoline. As demand seasonally improves each spring, the market typically sees beef production in the second quarter increase by about 300 million pounds from the first quarter. The increase last year was just 148 million pounds, and this was widely seen as providing support for a strong price rally into the spring of 2011. For the first time in at least 20 years, beef production will be down during the second quarter from the first quarter for this year according to the recent supply/demand update from the USDA. The estimated cattle slaughter came in at 122,000 head Friday and 9,000 head for Saturday. This brought the total for last week to 616,000 head, up from 602,000 head the previous week but down from 654,000 head a year ago. Boxed beef cutout values were up $1.00 at mid-session Friday and closed $1.36 higher at $191.81. This was up from $187.22 the prior week, and is the highest beef market since January 4th.
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