April cattle closed sharply higher on the session yesterday as the market found support from a surge higher in equity, energy and metal markets. Many traders have talked about a new all-time high trade for nearby futures but even after the rally yesterday, April futures started today's session more than 50 points shy of the February 22nd contract high. Outside market forces, a bounce in grain prices and talk that cash cattle might move higher this week also helped to support cattle prices as well. A combination of mild weather and sluggish marketings, due in large part to weak packer profit margins, may have helped to hold average weights and production at higher levels than expected. Meanwhile, news that weights fell slightly for the second week in a row and a slight increase in the daily slaughter pace could also be seen as positive forces.
Weekly U.S. beef export sales for the week ending February 23rd came in at 18,340 metric tonnes, compared with the prior 4-week average of 29,027. Cumulative sales for 2012 have reached 291,620 metric tonnes, up 2.7% from last year's pace. The estimated cattle slaughter came in at 125,000 head yesterday, which was higher than expected and considered somewhat positive. This brings the total for the week so far to 490,000 head, up from 472,000 head last week at this time but down from 512,000 head a year ago. Boxed beef cutout values were down 19 cents at mid-session yesterday and closed 35 cents lower at $198.45. This was up from $196.86 the prior week. Average dressed steer weights for the week ending February 18th came in at 854 pounds, down from 855 pounds the previous week but still up from 835 pounds last year. Beef production for the same week came in at 480.1 million pounds, down 3.34% over year ago.