Open interest fell again and is now down to the lowest level since 2010. The market has seen active fund trader long liquidation selling in recent days and this has pulled some of the futures premium to the cash market out of the market. However, cash markets are also under pressure and packer profit margins are still in the red and beef prices are still sluggish. The tightening supply outlook for late this year should eventually provide good support but the short-term news remains negative. Cash cattle traded at $123.00 in Kansas, down $3.00 from last week. December cattle closed sharply lower on the session yesterday as the commodity demand tone was weak again and traders see sluggish beef and cash market news as factors which could spark further long liquidation selling. The market traded slightly higher early with talk that the sell-off yesterday was overdone and ideas that the sharp break might help support some buying. However, continued weakness in the stock market and strong gains for the US dollar helped to spark increased long liquidation selling in many commodity markets. Cattle was no exception yesterday as fund traders were steady sellers driving the market down to the lowest level since July 18th. Traders came into the week "hoping" for steady to $1.00 lower cash this week at near $126 but bids emerged at $122 in Texas. Fund long liquidation was noted in cattle and many other agricultural and economic sensitive commodity markets. Slaughter came in well below trade expectations at 120,000 head. Traders believe packers might cut back on kills in an attempt to support beef prices. This brings the total for the week so far to 376,000 head, down from 379,000 last week at this time and down from 391,000 a year ago. Boxed beef cutout values were up 2 cents at mid-session yesterday and closed 23 cents lower at $192.45. This was down from $194.92 the prior week.