Packers successfully peeled $1 off the fed cattle market last week as $126 per hundredweight bought cattle in Kansas and Texas. Northern feedyards found steady money on dressed sales at $195 to $196 per hundredweight. Fed cattle prices are now about 12 percent higher than the summer low prices.

Cooler weather, analysts believe, is helping to strengthen beef demand and packers may be more aggressive this week. Last week’s boxed beef trade lends support to such ideas as Choice traded Friday at $193.34 per hundredweight, up $1.80 from the previous week. Select boxed beef traded Friday at $183.86, up $3.18 per hundredweight. The Choice-Select spread was $9.48 per hundredweight.

Tightening supplies of stocker and feeder cattle continue to drive a price rally that enters an 8th week despite scarce feed stocks and higher grain prices. Yearling feeder cattle and calves sold steady to $3 per hundredweight higher, and calves saw instances of $6 per hundredweight higher. This week’s hot spot appeared to be in and around the Oklahoma wheat pasture region.

USDA Market News reporter Corbitt Wall says modest rains in many of the hardest hit drought areas has encouraged  “buyers of every class of cattle to become more intent on making sure their cupboards aren’t empty, should record prices come around again.  It’s hard to recall just how steep the dog-day drop in the feeder markets was, but prices have now had a full six weeks of recovery time and the record levels of March are still a far cry away.  Calf prices are a good $20-$30 below mid-March 2012 and yearlings are $5-$10 behind, although the Northern Plains are closing-in quickly. “

Wall also notes that “perhaps the best demand is for lighter-weight yearlings or longtime weaned calves weighing from 600-800 pounds that will hit feedlot showlists in line with the April CME Live Cattle board.”

Last week’s auction receipts totaled 224,100 compared to 235,000 last week and 239,200 last year. Direct sales of stocker and feeder cattle totaled 42,100 with video/Internet sales at 3,800. The weekly total was 270,000, compared to 291,900 last year.

Slaughter cows and bulls sold steady to $3 lower. USDA's Cutter cow carcass cut-out value Friday morning was $162.06, down $4.34 from the previous Friday. Omaha cash corn was 29 cents per bushel lower for the week at $7.36 per bushel.

Friday’s cattle on feed report totaled 10.6 million head, down 1 percent from a year ago. Placements during August totaled 2 million head, down 11 percent from 2011. Marketings of fed cattle during August totaled 1.96 million head, 5 percent lower than 2011.