A few days ago, USDA raised its estimate for 2016 U.S. beef production ... again.

Since then the futures markets continued a slide, particularly the June and later contracts, into territory not seen since the big crash of last December. On Tuesday, the June contract dipped below $1.18 and on Wednesday it dropped more.

Cash bids are were thinner than thin. Cassandra Fish, a livestock market analyst and risk manager who writes for a group of beef companies, noted on Wednesday that "Bids are scarce to non-existent, a $127 surfacing south by one packer. Tiny cash trade occurred north yesterday at $208-209, compared to $214-216 last week, but still north of $131 equivalent."

This CME chart suggests how the weight of dropping live cattle futures is weighing on the cash market.

Another report Wednesday said packers offered $209-210 dressed for spot delivery and $205 dressed for deliver late in May.

Going back a few days, USDA raised its estimate of 2016 U.S. beef production to 24.825 billion pounds, up 1.2% from their previous estimate and up 4.8 over last year's production.

The agency projected 2016 slaughter steers prices to average somewhere around $134 per hundredweight of live weight. That was $3.50 lower than their previous forecast and $14 lower than the 2015 average.

More beef and lower prices should be positive for U.S. international trade, said Missouri economists Scott Brown and Ron Plain.

Because of all this, the pair noted that USDA expects U.S. beef exports to increase 8% in 2016 and is predicting a 14% decrease in U.S. beef imports. The U.S. was the fourth largest beef exporter in 2015 after Australia, India, and Brazil.

China has been steadily increasing their beef imports and USDA expects them to pass Japan this year to become the world's number two beef importing country, behind the U.S.

Fed cattle prices held steady last week in moderate volume then plunged early this week. Last week's cattle slaughter totaled 548,000 head, up 2.4% from last week and up 2.0% from a year ago. There were some rumors packers might try to take advantage of the price break and push slaughter up this week, even buying some shorter-fed cattle.

However, it's worth noting last week was the 94th consecutive week with steer weights above the year-ago level, said Brown and Plain. They also noted year-to-date cattle slaughter is up 0.7%, and because of heavier weights beef production is up 2.5%.

Prices at the Oklahoma City Stockyards were reported Wednesday as $5-12 lower for feeder steers and heifers. Last week's final report showed them steady on feeder cattle and $2 to $4 lower on calves compared with the previous week.