Key Takeaways
- • Hales Trading Co. reported that Tuesday's cattle slaughter estimate was 112,000 head, bringing week-to-date slaughter to 217,000 head, 1,000 head above last week, with the week on track for 554,000 head.
- • Hales expects packers to cut slaughter rates this week, with estimates in the 533,000–543,000-head range, to limit the decline in the beef cutout.
- • The choice cutout closed up $1.72 at $373.30 per cwt, but remained $2.46 below the same day last year, while the choice rib was $1,583.17, 10.5% above last year.
- • Fed cattle carcass weight rose to 959 pounds, one pound below last year's 960-pound peak, and Hales sees room for a new fall peak.
- • Hales says the December cattle contract closed above $230 after clearing the 200-day moving average and filling a July gap, and it exited long December positions while staying lightly short.
Summary
Hales Trading Co. reported that today's cattle slaughter estimate was 112,000 head, compared with 110,000 head a week earlier, bringing week-to-date slaughter to 217,000 head versus 216,000 last week. Slaughter is on track to reach 554,000 head this week. Hales noted that cow slaughter may have run 7,000 to 8,000 head above the prior week, easing price pressure on some cuts, though the higher cow beef supply could weigh on 90% lean beef and items such as the peeled knuckle from fed cattle. Hales said it is hearing there is too much beef in the pipeline and that packers are likely to cut slaughter rates this week, with estimates in the 533,000–543,000-head range.
In the wholesale market, the choice cutout rose $1.72 to $373.30, and select rose $1.63 to $361.54, though both had declined intraday from morning highs. Boxed beef volume was 73 loads, compared with 101 loads a week earlier. The choice cutout remained $2.46 below the same day last year. The choice rib, at $1,583.17, was up $151.10 and 10.5% above last year, and Hales said its strength is offsetting weakness elsewhere in the cutout.
Hales reported that fed cattle carcass weight rose six pounds to 959 pounds in the most recent week, 12 pounds above the same week last year and 38 pounds above 2024, and one pound below last year's peak of 960 pounds set in late November. The firm noted that the record carcass weight of 966 pounds was posted in the week of March 23, 2026, and that weights could test that high if feedlots keep cattle on feed. Choice and higher grading slipped 0.20% week over week to 87.40%, 3.30% above 2025 and 6.40% above the same week in 2024.
On policy, Hales discussed the Beef Retention and National Development Endorsement for Livestock Risk Protection (LRP), a Trump administration program intended to insure the opportunity cost of retaining heifers over a two-year period to rebuild the cow herd. Hales characterized the proposal as an election-year initiative and argued that heifer retention will depend on ample grass and stock water rather than insurance or federal mandates.
For futures, Hales said the most active December cattle contract moved above its 200-day moving average and closed above $230, filling a gap left in July. It cited a 50% retracement level of $228.66 and a 61.8% retracement of $232.72 as support, while noting overbought technical readings. Hales exited its long December positions for customers and remained lightly short, anticipating a correction after the $18.75 rally. Hales also flagged that USDA's Oct. 1 Cattle on Feed report is due Friday, Oct. 23, with analyst estimates compiled by Dow Jones Newswires placing September placements at 91.7% of last year.
In the wholesale market, the choice cutout rose $1.72 to $373.30, and select rose $1.63 to $361.54, though both had declined intraday from morning highs. Boxed beef volume was 73 loads, compared with 101 loads a week earlier. The choice cutout remained $2.46 below the same day last year. The choice rib, at $1,583.17, was up $151.10 and 10.5% above last year, and Hales said its strength is offsetting weakness elsewhere in the cutout.
Hales reported that fed cattle carcass weight rose six pounds to 959 pounds in the most recent week, 12 pounds above the same week last year and 38 pounds above 2024, and one pound below last year's peak of 960 pounds set in late November. The firm noted that the record carcass weight of 966 pounds was posted in the week of March 23, 2026, and that weights could test that high if feedlots keep cattle on feed. Choice and higher grading slipped 0.20% week over week to 87.40%, 3.30% above 2025 and 6.40% above the same week in 2024.
On policy, Hales discussed the Beef Retention and National Development Endorsement for Livestock Risk Protection (LRP), a Trump administration program intended to insure the opportunity cost of retaining heifers over a two-year period to rebuild the cow herd. Hales characterized the proposal as an election-year initiative and argued that heifer retention will depend on ample grass and stock water rather than insurance or federal mandates.
For futures, Hales said the most active December cattle contract moved above its 200-day moving average and closed above $230, filling a gap left in July. It cited a 50% retracement level of $228.66 and a 61.8% retracement of $232.72 as support, while noting overbought technical readings. Hales exited its long December positions for customers and remained lightly short, anticipating a correction after the $18.75 rally. Hales also flagged that USDA's Oct. 1 Cattle on Feed report is due Friday, Oct. 23, with analyst estimates compiled by Dow Jones Newswires placing September placements at 91.7% of last year.
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