April cattle closed moderately lower for the session yesterday, and well below the mid-session peak. An early rally pushed the market up to new contract highs, as positive outside market forces and a further rally in the US stock market were thought to have supported the market. However, the negative turnaround in equity markets and weakness in grains may have pressured the market later in the session. Weakness for outside market forces like the stock market and a stronger US dollar may help limit support for cattle today but tightening supply into the spring may help to underpin prices at these levels. A smaller showlist this week plus higher beef prices suggests that packers may pay steady to higher prices for live inventory this week. As demand seasonally improves each spring, the market typically sees beef production in the second quarter increase by about 300 million pounds. The increase last year was just 148 million, and this helped to provide solid support for the uptrend. For the first time in at least 20 years, beef production will be down in the second quarter from the first quarter, down 25 million pounds according to the recent supply/demand update from the USDA. The estimated cattle slaughter came in at 120,000 head yesterday, which was a little lower than expectations and could be a sign of weaker packer demand. This brings the total for the week so far to 367,000 head, down from 371,000 head last week at this time and down from 385,000 head a year ago. Packer margins have improved significantly in the past few weeks but still remain negative. Boxed beef cutout values were up $1.29 at mid-session yesterday and closed $1.43 higher at $189.38. This was up from $186.56 the prior week and is the highest beef market since January 10th.