While the current heat blast could spark lighter weights and smaller production ahead, weights have been running heavy up to this point. The actual slaughter reports for the week ending June 16th showed average dressed steer weights at 852 pounds, up from 848 the previous week and up 2.8% from a year ago. The higher than normal weights suggests sluggish beef demand and could pressure cattle prices. The extreme heat that the nation's mid-section is experiencing is a bearish demand factor, and weights were already high going into the hot weather, so heart wave's impact on the market may be muted. August and October cattle closed sharply higher on the session yesterday August pushed to its highest level since June 12th, as the heat in the plains and short-covering lent support. Ideas that total cattle slaughter supply will begin to erode for the rest of the year, especially if the liquidation selling that had resulted from higher grain prices and poor pasture and range conditions begins to subside, have provided some strength to the market. The USDA is forecasting third quarter production to be down from the second quarter for only the second time in the past 22 years. Higher than expected export sales of beef to Mexico have also lent support to the market. Weekly U.S. beef export sales came in at 18,400 metric tonnes, compared with the prior 4-week average of 17,300. Cumulative sales for 2012 have reached 497,000 metric tonnes, up 4.2% from last year's pace. The estimated cattle slaughter came in at 124,000 head yesterday. This brings the total for the week so far to 506,000 head, unchanged from last week at this time but down from 521,000 a year ago. Boxed beef cutout values were down $1.96 at mid-session yesterday and closed $1.81 lower at $196.12. This was down from $197.21 the prior week and was the lowest the cutout had been since May 29th.
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