In the three weeks from September 19 - October 3 the cattle kill bulged to 571,000 - 578,000. Last week saw that drop to 557,000.
The trade will now wonder if we can now confirm that the worst of the worst is behind us. Though cattle feeders in the North have not fixed their heavyweight problem they have taken concrete steps to get this situation under control. We would expect numbers in the 562,000 - 572,000 range this week and next before setting back into the end of the month. Today's cattle kill ran 112,000 head. This was over last Monday's small number of 106,000.
The afternoon estimate of showlists, the number of cattle available for packers to buy this week, grew by 17,000 head over last week. That was made from a +17,000 increase in Nebraska, +4,000 for Colorado, -6,000 for Kansas, and +2,000 for Texas.
We still have an argument with USDA on their Q4 beef production forecast. They are calling for 2.6% more beef in this quarter than last year. In the last two weeks, in the heart of this excess marketing issue, the kill was +1.5% and +1.6%. Where do they get their numbers from?
USDA's estimate of last week's average cash trade comes to $127. This is great news. On the charts the December holds a "breakaway gap" and could be the start of an uptrend. Don't forget our fundamental target was $147. Depending on the live animal to wholesale beef price correlation that is still not out of bounds.