WEBVTT
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Welcome to the Cattle Talk Podcast.
00:00:06.160 --> 00:00:12.800
Your weekly breakdown of cattle market fundamentals, key news, and the insight escaping the industry.
00:00:13.039 --> 00:00:18.160
Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
00:00:38.640 --> 00:00:39.759
I'm doing really well.
00:00:39.920 --> 00:00:41.840
Thanks for having me on, Lucas.
00:00:42.320 --> 00:00:45.280
Well, I uh I really like your taste in shirts today, Nick.
00:00:45.359 --> 00:00:46.960
I'm glad we're matching shirts.
00:00:47.119 --> 00:00:50.640
But uh uh getting on to a few more serious topics here.
00:00:50.799 --> 00:00:56.960
Uh this cattle market continues to offer uh a lot of excitement uh in various levels.
00:00:57.039 --> 00:01:00.240
So we're gonna kind of step through a few different items today.
00:01:00.399 --> 00:01:07.120
Uh first thing first, let kind of a review on what went on in the futures market uh here this week.
00:01:07.280 --> 00:01:13.920
Uh last week, of course, was a pretty ugly week when we looked at live cattle futures and feeder cattle futures for that matter.
00:01:14.079 --> 00:01:18.400
Uh this week a little bit quieter overall as we end the week, right, Nick?
00:01:18.640 --> 00:01:28.719
Yeah, well, we we ended the week quiet, like it was pretty flat week over week on on what the price actually did, but it was certainly a wild ride in between there, right?
00:01:28.799 --> 00:01:37.359
Like, I mean you you'd you'd look at the market, we'd be down for today, for example, down four bucks for a while, and and pretty soon we're green and deferred.
00:01:37.439 --> 00:01:40.719
So definitely pretty wide trading range again this week.
00:01:40.959 --> 00:01:48.879
You know, we were up in the low 220s and then down in the close to the low, you know, under the 214, 215 area.
00:01:49.040 --> 00:01:53.840
So it definitely was a wild ride, but week over week it doesn't look like it did much.
00:01:54.079 --> 00:01:58.159
Yep, and that's and and after the open this morning, we're gonna take that as a win.
00:01:58.319 --> 00:01:59.120
Uh, how about cash?
00:01:59.280 --> 00:02:02.239
Any reports uh uh cash out there in the countryside, Nick?
00:02:02.480 --> 00:02:22.879
Yeah, so they they did buy, you know, Packers bought a fair amount of cattle earlier in the week at lower money, um, which was a little bit surprising, but basis was positive, and I think with everything going on, and as you guys well discussed last week, this leverage shift, there's been some willing sellers, so they were able to buy some lower now.
00:02:22.960 --> 00:02:31.919
Today, cash um, and I think a lot of that trade was in that 223-224 area um earlier, even on Wednesday.
00:02:32.000 --> 00:02:38.319
So, but now today cash bids out there up to 226, and not a lot of willing sellers.
00:02:38.400 --> 00:02:45.520
I think uh um they you know the the cattle that were available got bought, and now everybody's kind of digging their heels in again.
00:02:45.680 --> 00:02:50.479
But that 226 bid out there is also, I think, what turned the board around today.
00:02:50.639 --> 00:02:51.520
Yeah, that's a good point.
00:02:51.680 --> 00:02:57.919
That's uh uh kind of a little bit slower uh people to pull a trigger on the sales, and hopefully that helped us rebound.
00:02:58.000 --> 00:03:02.800
And we well, it did help us rebound uh on the futures today versus where we opened at.
00:03:02.960 --> 00:03:06.319
Um this afternoon we did have a catalon feed report come out.
00:03:06.479 --> 00:03:11.759
That was you know probably the least exciting news of the day, as we'll get into here a little bit.
00:03:12.000 --> 00:03:17.120
Um, most of everything was pretty much right on uh estimates on the cattle on feed.
00:03:17.199 --> 00:03:20.400
Or what was your takes on on that information here?
00:03:20.639 --> 00:03:23.280
Yeah, there's just so much going on in the cattle market right now.
00:03:23.360 --> 00:03:30.000
It's it's hard to think that this cattle on feed report has much influence, but the the numbers still are important, right?
00:03:30.080 --> 00:03:39.120
Like we we they reported 102.5 percent on feed uh right now, so two and a half percent more cattle on feed than a year ago.
00:03:39.280 --> 00:03:55.520
And that was right even with the estimate, but that you know, certainly uh as we've made cattle bigger and marketing's down um substantially uh for the month of July, and also placements down, you know, are that's how we're getting to this two and a half percent higher than a year ago.
00:03:55.759 --> 00:03:59.039
Placements was the friendly number in the in the report.
00:03:59.120 --> 00:04:04.879
Uh the estimate I think was from around 93.5%, and that came in at 89.
00:04:05.680 --> 00:04:09.840
So that was a substantial decrease from what they were thinking we placed.
00:04:10.000 --> 00:04:12.479
Marketings was right in line with the estimate.
00:04:12.639 --> 00:04:17.519
You know, if anything, we'd call this report slightly friendly with that placement number coming in at 89.
00:04:18.319 --> 00:04:19.040
Sounds good.
00:04:19.199 --> 00:04:36.560
So, you know, you mentioned the craziness in the cattle market, and you know, we look back at last week, and uh last week it was the Tyson announcement and the closures and and then trying to figure out what all that meant and uh uh the rip board's reaction with that, and maybe even some kind of forward looking into it.
00:04:36.720 --> 00:04:41.360
Uh, and everything was relatively quiet this week until uh this morning.
00:04:41.519 --> 00:04:55.120
Uh I know when we got uh into our early meeting, we start uh hearing about this and seeing the information on uh Trump's truth uh social uh post there um about uh waiving some tariffs on ground beef.
00:04:55.279 --> 00:05:04.240
What uh give us the quick summary of the message uh uh that Trump sent out and what it kind of what it meant as we looked at it through the day here, Nick.
00:05:04.560 --> 00:05:20.079
Yeah, the announcement was that he is gonna reduce tariffs on 300,000 tons of beef um and and also price that beef at a 25% discount to the market, and that'd be on ground beef.
00:05:20.240 --> 00:05:22.639
So that is the domestic demand.
00:05:23.120 --> 00:05:31.360
Um that equates that the that tonnage equates to about a week and a half's worth of our harvest, of our cattle harvest.
00:05:31.439 --> 00:05:33.519
So it's a big number, it's a big deal.
00:05:33.839 --> 00:05:36.800
Uh, and then of course, this is all ground beef, right?
00:05:37.120 --> 00:05:52.399
So it's actually when you look at just you know the US ground beef consumption, it's actually about three weeks worth of our supply, and then of and that's on an annualized number, and then and this beef is all gonna come over the course of 90 days.
00:05:52.639 --> 00:05:58.560
So you're so you're gonna take in three works weeks worth of an annualized number within 90 days.
00:05:58.639 --> 00:06:02.000
That's a lot of beef to come in all at one shot.
00:06:02.160 --> 00:06:06.480
That's why the futures market was was getting beat up pretty hard this morning.
00:06:06.639 --> 00:06:10.879
It definitely was a bearish announcement uh to beef and cattle.
00:06:11.519 --> 00:06:12.959
But we rebounded well.
00:06:13.040 --> 00:06:16.800
And I like I said earlier, I think that cash market sparked it a bit.
00:06:16.959 --> 00:06:28.399
Well, we're gonna have to see how this all goes, if that's even really possible to get that kind of that you know, that kind of number you know into the country over the next 90 days, but it definitely is is creating some concern.
00:06:28.720 --> 00:06:36.079
Yeah, you bring up a good point of you it's one thing to put a number out uh on a tweet and and then now it's the follow-up to make sure it gets done.
00:06:36.240 --> 00:06:38.639
Like we've seen that on many things.
00:06:38.800 --> 00:06:48.319
Uh however, if you are waiving tariffs, I bet there are a lot of willing sellers out there uh in the world that are kind of saying, hey, here's our chance to sell beef into the U.S.
00:06:48.480 --> 00:06:51.920
uh a little higher dollar amount than they're probably receiving in their home country.
00:06:52.079 --> 00:06:56.319
So this is one of those, unfortunately, for the producer that might actually get done.
00:06:56.560 --> 00:07:06.399
Um And so I I know last week on the cattle podcast and and something we've talked a lot about in the office, and this message this morning kind of continued.
00:07:06.800 --> 00:07:13.279
Uh this momentum we have uh uh on the Packer side of the leverage equation, right?
00:07:13.439 --> 00:07:18.000
Um it seems like we're the uh for the longest time it was the opposite.
00:07:18.160 --> 00:07:24.720
The the producer probably had more leverage, and now we've seen a relatively short um time period here.
00:07:24.879 --> 00:07:27.759
The packer, the packer has a leverage now.
00:07:27.920 --> 00:07:31.360
Um that kind of continued again this week with this announcement, Nick.
00:07:31.439 --> 00:07:33.120
What what else are your thoughts on that?
00:07:33.439 --> 00:07:37.199
Well, yeah, I mean I know you guys talked a lot about it last week.
00:07:37.279 --> 00:07:42.319
The the leverage has shifted, um, but the whole thing is really snowballing, right?
00:07:42.399 --> 00:08:11.199
I mean, you the before all this funds were quite long, they weren't record long, but you start to incorporate all this news that's coming at the cattle market, heavy weights and and and plant losses, and now we're importing way more beef, and that snowball effect is is gonna get the funds out, and or at least it looks like that you know they're gonna be running for the door, and and and that that's when you really start to take um uh you know this market lower.
00:08:11.360 --> 00:08:13.120
And we saw it all this week, right?
00:08:13.199 --> 00:08:22.720
I mean, the m the cattle market would open a buck or two higher, and you know, within a couple hours we were two bucks lower, and that most of the week that's where we close.
00:08:22.879 --> 00:08:51.919
Now, again, we ended up being fairly close to where we closed last week, but but this snowball effect, you know, we've seen it in past cycles where uh once it gets going, it it, you know, we're not exactly sure where this thing kind of will bottom out seasonally, but when we got all these heavy cattle around us going into fall, and then you know, these loss of these plants, which we're buying a high percentage of negotiated cattle, uh that it the the writing's kind of on the wall there.
00:08:52.159 --> 00:08:52.399
Yep.
00:08:52.559 --> 00:09:01.840
No, you bring up a lot of good points, Nick, and and I think it reiterates uh for a lot of our producers, you you never know when the next news is going to drop, right?
00:09:01.919 --> 00:09:17.120
And so working in we're with Pro Ag Marketing, working with guys like Nick uh to make sure you have a plan in place so that when these news events hit, uh you aren't woke up with a a giant surprise or a bad feeling in your stomach because you didn't have a plan in place.
00:09:17.200 --> 00:09:25.039
Uh, I think it also goes to show the importance of having a an LRP or an LGM policy in place, right?
00:09:25.200 --> 00:09:35.679
Uh a lot of these news events are coming out after market hours, and sometimes that is a a nice opportunity uh to use those insurance products uh when the market isn't open.
00:09:35.759 --> 00:09:50.080
Uh, like I said, it doesn't mean that the market's always gonna go uh down when we when we put the insurance on, but at least it gives you an opportunity uh to lock in a price before the market opens and get yourself protected if you need more protection.
00:09:50.240 --> 00:09:52.240
So uh good call-outs there.
00:09:52.320 --> 00:09:58.799
Uh I have a feeling that uh we are not done with the excitement in the cattle market based on the last two weeks.
00:09:59.039 --> 00:10:10.000
And uh you can bet that we have ProAg will keep you uh informed on what's going on the best we can uh on the Cattle Talk Podcast and through lots of our uh ways of communication to you.
00:10:10.080 --> 00:10:14.559
So, Nick, thanks for coming uh into the podcast studios today and have a great weekend.
00:10:14.879 --> 00:10:16.000
Thank you, Lucas.
00:00:02.720 --> 00:00:05.759
Welcome to the Cattle Talk Podcast.
00:00:06.160 --> 00:00:12.800
Your weekly breakdown of cattle market fundamentals, key news, and the insight escaping the industry.
00:00:13.039 --> 00:00:18.160
Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
00:00:38.640 --> 00:00:39.759
I'm doing really well.
00:00:39.920 --> 00:00:41.840
Thanks for having me on, Lucas.
00:00:42.320 --> 00:00:45.280
Well, I uh I really like your taste in shirts today, Nick.
00:00:45.359 --> 00:00:46.960
I'm glad we're matching shirts.
00:00:47.119 --> 00:00:50.640
But uh uh getting on to a few more serious topics here.
00:00:50.799 --> 00:00:56.960
Uh this cattle market continues to offer uh a lot of excitement uh in various levels.
00:00:57.039 --> 00:01:00.240
So we're gonna kind of step through a few different items today.
00:01:00.399 --> 00:01:07.120
Uh first thing first, let kind of a review on what went on in the futures market uh here this week.
00:01:07.280 --> 00:01:13.920
Uh last week, of course, was a pretty ugly week when we looked at live cattle futures and feeder cattle futures for that matter.
00:01:14.079 --> 00:01:18.400
Uh this week a little bit quieter overall as we end the week, right, Nick?
00:01:18.640 --> 00:01:28.719
Yeah, well, we we ended the week quiet, like it was pretty flat week over week on on what the price actually did, but it was certainly a wild ride in between there, right?
00:01:28.799 --> 00:01:37.359
Like, I mean you you'd you'd look at the market, we'd be down for today, for example, down four bucks for a while, and and pretty soon we're green and deferred.
00:01:37.439 --> 00:01:40.719
So definitely pretty wide trading range again this week.
00:01:40.959 --> 00:01:48.879
You know, we were up in the low 220s and then down in the close to the low, you know, under the 214, 215 area.
00:01:49.040 --> 00:01:53.840
So it definitely was a wild ride, but week over week it doesn't look like it did much.
00:01:54.079 --> 00:01:58.159
Yep, and that's and and after the open this morning, we're gonna take that as a win.
00:01:58.319 --> 00:01:59.120
Uh, how about cash?
00:01:59.280 --> 00:02:02.239
Any reports uh uh cash out there in the countryside, Nick?
00:02:02.480 --> 00:02:22.879
Yeah, so they they did buy, you know, Packers bought a fair amount of cattle earlier in the week at lower money, um, which was a little bit surprising, but basis was positive, and I think with everything going on, and as you guys well discussed last week, this leverage shift, there's been some willing sellers, so they were able to buy some lower now.
00:02:22.960 --> 00:02:31.919
Today, cash um, and I think a lot of that trade was in that 223-224 area um earlier, even on Wednesday.
00:02:32.000 --> 00:02:38.319
So, but now today cash bids out there up to 226, and not a lot of willing sellers.
00:02:38.400 --> 00:02:45.520
I think uh um they you know the the cattle that were available got bought, and now everybody's kind of digging their heels in again.
00:02:45.680 --> 00:02:50.479
But that 226 bid out there is also, I think, what turned the board around today.
00:02:50.639 --> 00:02:51.520
Yeah, that's a good point.
00:02:51.680 --> 00:02:57.919
That's uh uh kind of a little bit slower uh people to pull a trigger on the sales, and hopefully that helped us rebound.
00:02:58.000 --> 00:03:02.800
And we well, it did help us rebound uh on the futures today versus where we opened at.
00:03:02.960 --> 00:03:06.319
Um this afternoon we did have a catalon feed report come out.
00:03:06.479 --> 00:03:11.759
That was you know probably the least exciting news of the day, as we'll get into here a little bit.
00:03:12.000 --> 00:03:17.120
Um, most of everything was pretty much right on uh estimates on the cattle on feed.
00:03:17.199 --> 00:03:20.400
Or what was your takes on on that information here?
00:03:20.639 --> 00:03:23.280
Yeah, there's just so much going on in the cattle market right now.
00:03:23.360 --> 00:03:30.000
It's it's hard to think that this cattle on feed report has much influence, but the the numbers still are important, right?
00:03:30.080 --> 00:03:39.120
Like we we they reported 102.5 percent on feed uh right now, so two and a half percent more cattle on feed than a year ago.
00:03:39.280 --> 00:03:55.520
And that was right even with the estimate, but that you know, certainly uh as we've made cattle bigger and marketing's down um substantially uh for the month of July, and also placements down, you know, are that's how we're getting to this two and a half percent higher than a year ago.
00:03:55.759 --> 00:03:59.039
Placements was the friendly number in the in the report.
00:03:59.120 --> 00:04:04.879
Uh the estimate I think was from around 93.5%, and that came in at 89.
00:04:05.680 --> 00:04:09.840
So that was a substantial decrease from what they were thinking we placed.
00:04:10.000 --> 00:04:12.479
Marketings was right in line with the estimate.
00:04:12.639 --> 00:04:17.519
You know, if anything, we'd call this report slightly friendly with that placement number coming in at 89.
00:04:18.319 --> 00:04:19.040
Sounds good.
00:04:19.199 --> 00:04:36.560
So, you know, you mentioned the craziness in the cattle market, and you know, we look back at last week, and uh last week it was the Tyson announcement and the closures and and then trying to figure out what all that meant and uh uh the rip board's reaction with that, and maybe even some kind of forward looking into it.
00:04:36.720 --> 00:04:41.360
Uh, and everything was relatively quiet this week until uh this morning.
00:04:41.519 --> 00:04:55.120
Uh I know when we got uh into our early meeting, we start uh hearing about this and seeing the information on uh Trump's truth uh social uh post there um about uh waiving some tariffs on ground beef.
00:04:55.279 --> 00:05:04.240
What uh give us the quick summary of the message uh uh that Trump sent out and what it kind of what it meant as we looked at it through the day here, Nick.
00:05:04.560 --> 00:05:20.079
Yeah, the announcement was that he is gonna reduce tariffs on 300,000 tons of beef um and and also price that beef at a 25% discount to the market, and that'd be on ground beef.
00:05:20.240 --> 00:05:22.639
So that is the domestic demand.
00:05:23.120 --> 00:05:31.360
Um that equates that the that tonnage equates to about a week and a half's worth of our harvest, of our cattle harvest.
00:05:31.439 --> 00:05:33.519
So it's a big number, it's a big deal.
00:05:33.839 --> 00:05:36.800
Uh, and then of course, this is all ground beef, right?
00:05:37.120 --> 00:05:52.399
So it's actually when you look at just you know the US ground beef consumption, it's actually about three weeks worth of our supply, and then of and that's on an annualized number, and then and this beef is all gonna come over the course of 90 days.
00:05:52.639 --> 00:05:58.560
So you're so you're gonna take in three works weeks worth of an annualized number within 90 days.
00:05:58.639 --> 00:06:02.000
That's a lot of beef to come in all at one shot.
00:06:02.160 --> 00:06:06.480
That's why the futures market was was getting beat up pretty hard this morning.
00:06:06.639 --> 00:06:10.879
It definitely was a bearish announcement uh to beef and cattle.
00:06:11.519 --> 00:06:12.959
But we rebounded well.
00:06:13.040 --> 00:06:16.800
And I like I said earlier, I think that cash market sparked it a bit.
00:06:16.959 --> 00:06:28.399
Well, we're gonna have to see how this all goes, if that's even really possible to get that kind of that you know, that kind of number you know into the country over the next 90 days, but it definitely is is creating some concern.
00:06:28.720 --> 00:06:36.079
Yeah, you bring up a good point of you it's one thing to put a number out uh on a tweet and and then now it's the follow-up to make sure it gets done.
00:06:36.240 --> 00:06:38.639
Like we've seen that on many things.
00:06:38.800 --> 00:06:48.319
Uh however, if you are waiving tariffs, I bet there are a lot of willing sellers out there uh in the world that are kind of saying, hey, here's our chance to sell beef into the U.S.
00:06:48.480 --> 00:06:51.920
uh a little higher dollar amount than they're probably receiving in their home country.
00:06:52.079 --> 00:06:56.319
So this is one of those, unfortunately, for the producer that might actually get done.
00:06:56.560 --> 00:07:06.399
Um And so I I know last week on the cattle podcast and and something we've talked a lot about in the office, and this message this morning kind of continued.
00:07:06.800 --> 00:07:13.279
Uh this momentum we have uh uh on the Packer side of the leverage equation, right?
00:07:13.439 --> 00:07:18.000
Um it seems like we're the uh for the longest time it was the opposite.
00:07:18.160 --> 00:07:24.720
The the producer probably had more leverage, and now we've seen a relatively short um time period here.
00:07:24.879 --> 00:07:27.759
The packer, the packer has a leverage now.
00:07:27.920 --> 00:07:31.360
Um that kind of continued again this week with this announcement, Nick.
00:07:31.439 --> 00:07:33.120
What what else are your thoughts on that?
00:07:33.439 --> 00:07:37.199
Well, yeah, I mean I know you guys talked a lot about it last week.
00:07:37.279 --> 00:07:42.319
The the leverage has shifted, um, but the whole thing is really snowballing, right?
00:07:42.399 --> 00:08:11.199
I mean, you the before all this funds were quite long, they weren't record long, but you start to incorporate all this news that's coming at the cattle market, heavy weights and and and plant losses, and now we're importing way more beef, and that snowball effect is is gonna get the funds out, and or at least it looks like that you know they're gonna be running for the door, and and and that that's when you really start to take um uh you know this market lower.
00:08:11.360 --> 00:08:13.120
And we saw it all this week, right?
00:08:13.199 --> 00:08:22.720
I mean, the m the cattle market would open a buck or two higher, and you know, within a couple hours we were two bucks lower, and that most of the week that's where we close.
00:08:22.879 --> 00:08:51.919
Now, again, we ended up being fairly close to where we closed last week, but but this snowball effect, you know, we've seen it in past cycles where uh once it gets going, it it, you know, we're not exactly sure where this thing kind of will bottom out seasonally, but when we got all these heavy cattle around us going into fall, and then you know, these loss of these plants, which we're buying a high percentage of negotiated cattle, uh that it the the writing's kind of on the wall there.
00:08:52.159 --> 00:08:52.399
Yep.
00:08:52.559 --> 00:09:01.840
No, you bring up a lot of good points, Nick, and and I think it reiterates uh for a lot of our producers, you you never know when the next news is going to drop, right?
00:09:01.919 --> 00:09:17.120
And so working in we're with Pro Ag Marketing, working with guys like Nick uh to make sure you have a plan in place so that when these news events hit, uh you aren't woke up with a a giant surprise or a bad feeling in your stomach because you didn't have a plan in place.
00:09:17.200 --> 00:09:25.039
Uh, I think it also goes to show the importance of having a an LRP or an LGM policy in place, right?
00:09:25.200 --> 00:09:35.679
Uh a lot of these news events are coming out after market hours, and sometimes that is a a nice opportunity uh to use those insurance products uh when the market isn't open.
00:09:35.759 --> 00:09:50.080
Uh, like I said, it doesn't mean that the market's always gonna go uh down when we when we put the insurance on, but at least it gives you an opportunity uh to lock in a price before the market opens and get yourself protected if you need more protection.
00:09:50.240 --> 00:09:52.240
So uh good call-outs there.
00:09:52.320 --> 00:09:58.799
Uh I have a feeling that uh we are not done with the excitement in the cattle market based on the last two weeks.
00:09:59.039 --> 00:10:10.000
And uh you can bet that we have ProAg will keep you uh informed on what's going on the best we can uh on the Cattle Talk Podcast and through lots of our uh ways of communication to you.
00:10:10.080 --> 00:10:14.559
So, Nick, thanks for coming uh into the podcast studios today and have a great weekend.
00:10:14.879 --> 00:10:16.000
Thank you, Lucas.
