February cattle closed sharply higher on the session yesterday and pushed to new contract highs and new all-time highs for the nearby futures. Some traders feel that a lull in beef prices if it occurs soon could trigger a selloff. Other traders see higher corn prices as a reason to suspect lower beef supply ahead, and that other recent developments are indicating either lower imports or higher export potential ahead. Flooding in Australia is expected to keep imports of beef low with that nation being the second largest beef exporter in the world. The weekly sales report this morning may provide the market with some clues towards better export demand ahead. Foot and mouth disease in South Korea and dioxin-tainted feed in Europe are factors which some traders believe could support better demand for US meat on the world market. Beef prices have moved towards their highest levels since May of last year. Cold and snow in the plains is also widely seen as a supportive factor for the market. In the USDA supply/demand report, 2011 beef production was revised up by 125 million pounds but is still expected to be down 651 million pounds or 2.4% from last year. For comparison, US production is near 500 million per week. The estimated cattle slaughter came in at 119,000 head yesterday. This brings the total for the week so far to 361,000 head, down from 367,000 head last week at this time and down from 379,000 head a year ago. Boxed beef cutout values were up 98 cents at mid-session yesterday and closed $1.17 higher at $168.59. This was up from $166.81 the prior week and is the highest beef market since May 18th last year.