June cattle closed moderately lower on the session yesterday with light demand concerns seen as a negative factor by some traders. However, a large portion of recent weakness appears to be coming from outside market forces. A more positive demand outlook helped to support the market early but weakness in grains, metals and energy markets and a rally in the US dollar were seen as a main source of early pressure. A sharp sell-off in hogs may have added to the negative tone of the cattle market. The current discount of June futures to the cash market may be to providing some support but the market has now given back more than half of the gains seen during the Friday/Monday rally. December cattle rose to a 5-session high, due to projections of index fund rolling of front-month long position next week. Many traders are waiting for a better indication for the cash market this week but a small number of cattle have moved in Kansas and Nebraska at $117.00, while offers in Texas are at $122.00. With the rise in cash corn basis levels and recent weakness in the cattle market, feeding margins have been hit hard in the past month and some traders are anticipating a sharp decline in feedlot placements for April, May and June. Pasture and range conditions are much better than last year, which may help to keep cattle away from feedlots. In addition, non-fed cattle slaughter could be slower than normal into the summer as more heifers could be held back from pasture. The estimated cattle slaughter came in at 126,000 head yesterday. This brings the total for the week so far to 364,000 head, down from 368,000 head last week at this time and down from 387,000 head a year ago. Boxed beef cutout values were up 79 cents at mid-session yesterday, and closed 71 cents higher at $191.18. This was up from $190.49 the prior week and is the highest beef market since March 19th.
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