August cattle closed limit-up at 107.85 yesterday and lifted prices to their highest level since May 19th. Cash cattle in Texas traded as high as $109.00, up $3.00-$4.00 from last week and Nebraska cattle traded at $111.00-$112.00, up $5.00. The surge in cash cattle prices leaves August futures at a discount to the cash market, even after a 100 point rally overnight and a limit-up move yesterday. The market traded slightly higher early in the session, but a move above the June 9th highs was seen as helping to lift the market sharply higher for the day. Indications of strong packer margins along with more active beef volume helped to support ideas that the cash market could trade higher. In addition, many traders expect this afternoon's update from the USDA to show smaller cattle placements during the month of May, which might cause slower production into the 4th quarter. As of May 1st, Cattle-On-Feed supply was at 7.4% above last year. For the Cattle-on-Feed report this afternoon, traders see placements during May coming in about 7%-9% below last year and feedlot marketings near 2%-4% above last year. As a result, On-Feed supply could set back to around 5% above last year. Weekly U.S. beef export sales were strong at 15,800 metric tonnes, compared with the prior 4-week average of 9,200 tonnes. Cumulative sales for 2011 have reached 438,300 metric tonnes, up 32.4% from last year's pace. The estimated cattle slaughter came in at 130,000 head yesterday. This brings the total for the week so far to 519,000 head, up from 507,000 head last week at this time and up from 511,000 head a year ago. Boxed beef cutout values were up 37 cents at mid-session yesterday and closed 22 cents higher at $172.16. This was down from $172.58 the prior week. Average dressed steer weights for the week ending June 4th came in at 827 pounds, up from 820 the previous week and up 1.22% from a year ago.