April cattle closed lower yesterday and fell to the lowest price levels since February 13th. The cattle market is in a 4-day losing streak that has seen prices fall more than $3.20 from last week's high of $131.50. Weakness in energy markets, a selloff in the US dollar and talk that Australia is expected to boost their beef imports well above year ago levels were seen as positive factors for the cattle market. Some traders feel it possible that the recent weakness in April cattle futures might have been worse if it weren't for a more than 2.0% drop in gasoline prices yesterday. While beef prices are on the rise, traders see slower volume of trade on the beef rally as another reason to fear a potential backlog of supply and a slowdown in the beef pipeline. There was some light trade in the cash market yesterday in Texas at $128.00, which would be down $1.00 for the week. Boxed beef cutout values were up 6 cents at mid-session yesterday and closed 9 cents higher at $198.65. This was up from $194.15 the prior week and is at the highest level since $200.65 on October 20th of 2003. Some traders indicated that choice cutouts could approach the $200 level this week, especially in the wake of last week's decline in slaughter activity.The USDA estimated livestock slaughter at 124,000 head, which was a bit above expectations. This brings the total for the week so far to 246,000 head, up from 230,000 head last week at this time but down from 256,000 head a year ago.
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