Key Takeaways
- • Hales Trading projects cattle slaughter of 540,000 to 550,000 head for the week, raising its range after several estimates came in at 545,000 to 546,000 head, with week-to-date slaughter at 326,000 head versus 323,000 a week earlier.
- • Hales warns that a 545,000-head kill would add more beef to the pipeline than the market can easily absorb, and says the spot choice cutout could fall below $370.00 from $375.15.
- • The daily choice cutout closed up $1.35 at $376.50 and select finished at $358.40, up $4.80, while boxed beef volume was 73 loads versus 91 a week earlier.
- • Fed cattle cash trade in Nebraska has held in a $4.00 range for more than six weeks, the longest such stretch since 2024, with Hales expecting steady trade again this week.
- • The most active December live cattle futures contract closed at $225.12, below the 100-day moving average, and Hales flags overbought technical indicators and a possible correction after a $16.00 rally.
Summary
Hales Trading Co. raised its estimate for U.S. cattle slaughter this week to a range of 540,000 to 550,000 head, up from its earlier projection, after finding several estimates at 545,000 to 546,000 head. Today's kill was estimated at 110,000 head, compared with 111,000 head last Wednesday, bringing the week-to-date total to 326,000 head against 323,000 a week earlier. At the current pace, slaughter is on track for 538,000 head.
Hales cautioned that a kill near 545,000 head would put more product into the beef pipeline than the market can readily absorb. The firm said the beef trade has been softer than expected, and that the spot choice cutout closed Tuesday at $375.15, a level it believes a 545,000-head kill could push below $370.00. Hales also cited a Foodmarket by Expana review of the Consumer Price Index, which showed food-at-home prices easing 0.1% in September, a 0.5% decline in the meats, poultry, fish and eggs index led by a 1.0% drop in beef prices, and grocery prices still 1.8% higher than a year earlier.
In the daily cutout, choice finished up $1.35 at $376.50 and select closed at $358.40, up $4.80, with boxed beef volume at 73 loads compared with 91 loads a week earlier. Hales noted that virtually all truck shippers are facing diesel fuel surcharges, pushing up the cost of shipping product.
In live cattle, Hales reported a bid of $226 in the Texas Panhandle without a confirmed trade, and a sale on the Fed Cattle Exchange at $226. The USDA reported no trades in Nebraska or Iowa that day. The Nebraska fed cattle average last week was $221.61, and Hales said the Texas-Nebraska spread has widened, with Texas at $226 about $4.39 above Nebraska, although the USDA does not report Texas fed cattle trade. Hales expects steady cash trade this week.
In futures, the most active December contract closed at $225.12, 40 points below the 100-day moving average after a late-session sell-off. Hales sees support from $225 down to the 10-day moving average, projected at $224.37 on Thursday. The firm said technical indicators have moved into overbought territory and, while clear sell signals have not yet appeared, it would not be surprised by a price correction following the end of a $16.00 rally on Tuesday.
Hales cautioned that a kill near 545,000 head would put more product into the beef pipeline than the market can readily absorb. The firm said the beef trade has been softer than expected, and that the spot choice cutout closed Tuesday at $375.15, a level it believes a 545,000-head kill could push below $370.00. Hales also cited a Foodmarket by Expana review of the Consumer Price Index, which showed food-at-home prices easing 0.1% in September, a 0.5% decline in the meats, poultry, fish and eggs index led by a 1.0% drop in beef prices, and grocery prices still 1.8% higher than a year earlier.
In the daily cutout, choice finished up $1.35 at $376.50 and select closed at $358.40, up $4.80, with boxed beef volume at 73 loads compared with 91 loads a week earlier. Hales noted that virtually all truck shippers are facing diesel fuel surcharges, pushing up the cost of shipping product.
In live cattle, Hales reported a bid of $226 in the Texas Panhandle without a confirmed trade, and a sale on the Fed Cattle Exchange at $226. The USDA reported no trades in Nebraska or Iowa that day. The Nebraska fed cattle average last week was $221.61, and Hales said the Texas-Nebraska spread has widened, with Texas at $226 about $4.39 above Nebraska, although the USDA does not report Texas fed cattle trade. Hales expects steady cash trade this week.
In futures, the most active December contract closed at $225.12, 40 points below the 100-day moving average after a late-session sell-off. Hales sees support from $225 down to the 10-day moving average, projected at $224.37 on Thursday. The firm said technical indicators have moved into overbought territory and, while clear sell signals have not yet appeared, it would not be surprised by a price correction following the end of a $16.00 rally on Tuesday.
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