A more positive tilt to outside market forces this morning may have helped slow the selling pressures brought about by the weak technical action of the past few weeks. There were no new deliveries overnight, which might help slow the selling seen in the past few sessions.

Boxed beef cutout values were up 41 cents at mid-session yesterday and closed 16 cents lower at $191.98. This was down from $193.85 the prior week and is the lowest beef market since August 16th.

October cattle closed sharply lower on the session yesterday and experienced the lowest close since July 26th. The market attracted increased selling when futures took out last week's low. Weakness in the beef market, new deliveries and expectations for sluggish consumer demand after the Labor Day holiday helped to pressure.

With beef prices near a 10-day low, traders were not too optimistic on the cash market outlook for this week and cash remains at a discount to October futures. The premium could encourage speculators to move to the sidelines. Non-commercial traders were net long 46,481 contracts as of last Tuesday and open interest is declining; suggesting long liquidation selling.

Slaughter came in below trade expectations at 126,000 head, which sometimes is an indication of weaker demand from the packer. This was down from 129,000 last week and down from 127,000 a year ago as this time.

The market is entering a time period for the next six weeks where declining supply could clash with the tendency to see marginal producer liquidation and increased non-fed and cow slaughter as producers decide to move cattle instead of feeding through the winter. Beef production is expected to decline into October but the liquidation trend is tough to predict.

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