The seriousness of the Midwest drought and the resulting tight supply of feedgrains is the main short-term focus on the market. If the western Corn Belt crop conditions continue to deteriorate, poultry, pork and beef producers will all be under the gun to cut costs and move un-needed animals. As pasture and range conditions deteriorate, there will be a tendency for more and more cows to enter the slaughter mix. Milk cow operators are also suffering from poor margins, which adds to the potential short-term supply glut followed by tightening supply for 2013. As of Sunday, there was only 18% of the US pasture and range in good to excellent condition as compared with 21% last week and 46% last year. August cattle closed moderately lower on the session yesterday and near the lows of the day with August feeder cattle locked down the limit into the close. October cattle also closed sharply lower and experienced the lowest close since June 26th as traders fear increased movement of breeding stock onto the market late in the summer and this fall. The market traded a little higher on the day early in the session yesterday but pushed lower late. A weak demand tone due to hot and humid weather for the next few weeks plus fears that production will be higher than expected due to some marginal producer liquidation of breeding stock helped to pressure. The estimated cattle slaughter came in at 125,000 head yesterday. This was down from 127,000 last week and down from 128,000 a year ago at this time. Boxed beef cutout values were up 21 cents at mid-session yesterday and closed 10 cents lower at $183.84. This was down from $190.51 the prior week and is the lowest beef market since April 17th.