August cattle closed slightly higher on the session Friday, but well below the early highs. Beef prices were down sharply last week due to sluggish retail demand for beef in the US due to hot weather. With weakness in equity markets overnight and a negative tone from the USDA reports on Friday, some traders feel that the market may be vulnerable to weakness early this week. In the Cattle-On-Feed report, placements came in higher than expectations, which may have brought about ideas that production during October and November may also be higher than expected. While there were several traders looking for placements to fall more than 10%, placements came in at 104.1% of last year, which many traders felt to be the main piece of negative news from the report. With deteriorating pasture and range conditions, traders have been expecting more cattle to move to market or to feedlots, which was offset by ideas that active placements earlier this year may have tightened the supply of available cattle. Marketings came in at 5.3% above last year, well above trade expectations calling for them to be 1.5% to 4.5% higher. July 1st on-feed supply came in somewhat higher than expected 103.8% but declined from 104.1% on June 1st and 107.4% on May 1st. For the Cattle Inventory report, traders expected total cattle numbers near 98.6% of last year but the report showed 99%. The calf crop was also 99% vs. expectations near 98.5%. Beef replacement heifers were just 95% as compared with 96.7% of last year. For the monthly Cold Storage report, frozen beef stocks were pegged at 434.51 million pounds, down 3% from the previous month but up 16% from last year. While the longer-term supply outlook for beef appears for many traders to be tight, the drought in the southern plains has helped push more cattle to market and/or to feedlots in recent months. However, average weights for some reason have risen higher in recent weeks. Commercial red meat production in the US during June reached a record-high 4.22 billion pounds, up 1% from last year. Beef production in June was up 2% from last year. Veal production was up 4% from last year, and calf slaughter was up 6% from last year. The estimated cattle slaughter came in at 126,000 head Friday and 14,000 head for Saturday. This brought the total for last week to 651,000 head, down from 667,000 head the previous week and down from 666,000 head a year ago. Boxed beef cutout values were down 89 cents at mid-session Friday and closed 89 cents lower at $175.70. This was down from $180.88 the prior week and is the lowest beef market since June 20th.