Key Takeaways
- • Choice boxed beef cutout finished $0.41 lower at $375.15/cwt and Select finished $0.46 lower at $353.67, with the Choice quote $3.78 below last Tuesday, according to Hales Trading Co.'s cattle letter.
- • Packer margins remain positive, which Hales says will encourage packers to hold weekly slaughter within the 530,000–540,000 head range, with 535,000 head projected for the week.
- • Hales warns that any slaughter push above 535,000–540,000 head could take the cutout down sharply, and says the market may "run out of gas" at $230.00 in the December contract.
- • Cow beef weakness is a concern: 90% lean cow beef at $395.68 sits just $0.72 above its 2026 low, and cow slaughter through late September was 163,000 head below last year.
- • Rib prices have held up the cutout at record-high levels, and Hales says a decline in rib would push the overall Choice cutout lower.
Summary
Hales Trading Co.'s daily cattle letter reports that the beef cutout weakened even as packer margins stayed in positive territory. Today's cattle slaughter estimate was 110,000 head, unchanged from last Tuesday, bringing the week-to-date total to 216,000 head versus 212,000 a week earlier. Slaughter is on track for 535,000 head this week, within an estimated 530,000–540,000 head range. Hales notes that positive margins should keep packers from raising slaughter, and that a Saturday kill could erase the positive margin, making the slaughter rate the key variable for the market.
On the cutout, Choice rose $0.98 early in the session before downside pressure took hold. Choice closed $0.41 lower at $375.15 and Select closed $0.46 lower at $353.67. Boxed cut volume was 101 loads compared with 103 a week earlier. Hales says ground beef continues to appear on too many push lists, and that retail prices remain high despite the earlier strength in ground beef. Some companies that had not previously added a fuel surcharge are now doing so.
Hales highlights that companies using deep-chill technology have taken delivery of rib and other cuts purchased 60–90 days earlier, for holiday business a few weeks out. The letter cites several hundred tons of rib bought in July for Christmas and New Year roasts as evidence that deep-chill storage is shifting traditional seasonal purchasing patterns. Rib has been the one cut at record-high prices this fall, and Hales says rib quotes helped hold the cutout together as ground beef weakened.
The 81% ground beef price of $353.77 is about $25 above last year's $328.82, though Hales describes the market as lacking momentum. The 90% lean cow beef price of $395.68 is $27.70 below the same day in 2025. Hales attributes the cow beef weakness partly to total cow slaughter through the last week of September running 163,000 head below last year, and warns that a normal seasonal increase in cow slaughter could push 90% lean significantly lower.
Fed cattle weights rose one pound to 953 pounds, nine pounds above a year earlier and 36 pounds above 2024. Hales notes that weights peaked at 960 pounds during the week of December 1 last year and may not exceed that level this year, with weather-related feedlot issues a possible constraint. Choice and higher grading rose 0.20% to 87.60%, which is 4.40 percentage points above 2025 and 5.80 points above 2024. Hales concludes it is wary of the cutout's direction and expects the market to lose momentum at $230.00 in the December contract.
On the cutout, Choice rose $0.98 early in the session before downside pressure took hold. Choice closed $0.41 lower at $375.15 and Select closed $0.46 lower at $353.67. Boxed cut volume was 101 loads compared with 103 a week earlier. Hales says ground beef continues to appear on too many push lists, and that retail prices remain high despite the earlier strength in ground beef. Some companies that had not previously added a fuel surcharge are now doing so.
Hales highlights that companies using deep-chill technology have taken delivery of rib and other cuts purchased 60–90 days earlier, for holiday business a few weeks out. The letter cites several hundred tons of rib bought in July for Christmas and New Year roasts as evidence that deep-chill storage is shifting traditional seasonal purchasing patterns. Rib has been the one cut at record-high prices this fall, and Hales says rib quotes helped hold the cutout together as ground beef weakened.
The 81% ground beef price of $353.77 is about $25 above last year's $328.82, though Hales describes the market as lacking momentum. The 90% lean cow beef price of $395.68 is $27.70 below the same day in 2025. Hales attributes the cow beef weakness partly to total cow slaughter through the last week of September running 163,000 head below last year, and warns that a normal seasonal increase in cow slaughter could push 90% lean significantly lower.
Fed cattle weights rose one pound to 953 pounds, nine pounds above a year earlier and 36 pounds above 2024. Hales notes that weights peaked at 960 pounds during the week of December 1 last year and may not exceed that level this year, with weather-related feedlot issues a possible constraint. Choice and higher grading rose 0.20% to 87.60%, which is 4.40 percentage points above 2025 and 5.80 points above 2024. Hales concludes it is wary of the cutout's direction and expects the market to lose momentum at $230.00 in the December contract.
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