The results of the Cattle on Feed report, which will be released after the close today, and cash market activity for this week should help set the near term price direction. Sluggish beef prices, expectations for placements to jump 13% for the month of May and hefty cold storage are all factors that have helped keep the short term trend down. The estimated cattle slaughter came in at 128,000 head yesterday, which was higher than expected. This could be a signal of strong demand from the packer. This brings the total for the week so far to 506,000 head, down from 510,000 last week at this time and down from 519,000 a year ago. Boxed beef cutout values were down 45 cents at mid-session yesterday and closed 79 cents lower at $197.21. This was down from $198.17 the prior week and the lowest since June 8th. Average dressed steer weights for the week ending June 9th came in at 848 pounds, down from 850 the previous week but still up from 827 pounds last year. For the same week, slaughter was up 7.9% from the previous year, but the surge in weights left beef production up 10.35% over a year ago. August cattle closed lower, and October closed down 45 on the session and down to the lowest close since April 27th. Demand expectations continue to deteriorate with a sharp break in the stock market and a jump in the US dollar helping to pressure most commodity markets yesterday. Cash bids in Texas this week are at $114.00, with offers at $120.00. Weekly U.S. beef export sales for the week ending June 14th came in at 15,000 metric tonnes, compared with the prior 4-week average of 17,150. Cumulative sales for 2012 have reached 478,600 metric tonnes, up 3.7% from last year's pace. For the USDA Cattle on Feed report this afternoon, traders are looking for placements to be up 13% for the month of May, which could hold on-feed supply as of June 1st 0.7% higher than last year. Marketings for the month of May are expected be around 5% over last year. Low placements in March and April plus a noted increase in imports of feeder cattle are factors which might contribute to the higher placements. The Cold Storage Report is also out this afternoon, and most traders are looking for a slight increase in beef stocks from last month and for them to be up 16% from last year. Beef cold storage stocks typically hold steady for the month of May.
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