Cattle feeders continued gaining market leverage last week as supplies of market-ready decline. The cash market gained $1 per hundredweight at $119, with a few cattle trading late on Friday $2 higher at $120 per hundredweight. Cattle sold on a dressed basis were $3 to $5 per hundredweight higher at $188 to $190.

Feedyards will begin the week asking higher money with ideas packers will aggressively seek cattle to fill orders.

Boxed beef prices moved significantly higher as retail demand picks up prior to the Labor Day weekend. Choice boxed beef values closed Friday at $184.95, an increase of $6.81 per hundredweight from the previous Friday. Select boxed beef prices were quoted at $177.65, up $6.02 from the previous week. The Choice-Select spread stood at $7.30 per hundredweight.

Packer margins improved with the higher boxed beef prices, and feedyards likely saw an improvement to their dismal margins.

Feeder cattle posted a healthy price gain for the second consecutive week with bids steady to $4 per hundredweight higher. Calf prices found a wider price range generally called $3 lower to $5 higher. USDA Market News reported calf prices in some the worst drought-stricken areas such as Missouri saw bids as much as $10 higher from out of state buyers. Demand for feeder cattle has been called aggressive the past two weeks.

Last week’s auction receipts totaled 141,800 compared to 126,200 last week and 190,700 last year. Direct sales of stocker and feeder cattle totaled 72,200 with video/Internet sales at 51,500. The weekly total was 265,500, compared to 317,600 last year.

Slaughter cows and bulls sold steady to $3 per hundredweight higher. USDA's Cutter cow carcass cut-out value Friday morning was $163.57, up $0.18 from the previous Friday. Omaha cash corn was 22 cents per bushel higher for the week at $8.21 per bushel.

The week’s biggest news centered around USDA’s release of the Crop Production report and the revisions in the World Agricultural Supply and Demand Estimates (WASDE). U.S. corn supply estimates for new crop corn was revised downward 2.2 billion bushels to total production of 10.8 billion bushels.

The production estimate was based on a national average yield of 123.4 bushels per acre, nearly 23 bushels per acre lower than July’s estimate of 146. As forecast, the 2012/13 corn yield per acre would be the lowest since 1995/96. Total U.S. corn production for 2012/13 at 10.8 billion bushels would be the lowest since 2006/07.

Acreage harvested for grain was revised 1.49 million acres lower to 87.361 million, representing 90.6 percent of the planted acreage estimate of 96.405 million. Total corn supply was estimated at 11.88 billion bushels, down more than 2 billion bushels compared to the July estimate.