The December cattle market remains overbought technically, but there is no good fundamental reason for sellers to start becoming a more active participant in the market. U.S. beef production is expected to be 120 million pounds lower in the 4^th quarter than it was in the 3^rd. Last year, production increased by 43 million pounds over the same period and it would also be the first time in 5 years that production increased in the 4^th quarter. The USDA boxed beef cutout was up 75 cents at mid-session yesterday and closed 80 cents higher at $220.93. This was up from $218.02 the previous week and was the highest the cutout had been since September 10th. The higher beef trend could support a positive tilt to the cash cattle trade this week. The USDA estimated cattle slaughter came in at 119,000 a head yesterday. This brings the total for the week so far to 237,000 head, up from 235,000 last week, but down from 238,000 a year ago. The cattle on feed report is released on Friday and is expected to only show a modest increase in both the placements and marketings during September and fewer cattle on feed than the previous year. I expect the market to trade sideways for the rest of the week and into next week. If there is a breakout over the $115 level, then I suspect a further run up to the $118 level. If there is a rejection at the $115 level, then expect a retracement down the $112 level.