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Cattle: COF · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Cattle Talk Podcast.
• 0:05
  SPEAKER_00: Your weekly breakdown of cattle market fundamentals, key news, and the insights shaping the industry.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:20
  SPEAKER_02: Today is January 23rd.
• 0:22
  SPEAKER_02: I've got Jace live with us here.
• 0:23
  SPEAKER_02: How's it going?
• 0:24
  SPEAKER_02: It's going pretty good.
• 0:25
  SPEAKER_02: Awesome.
• 0:26
  SPEAKER_02: Well, we're going to talk about cattle today on the Cattle Podcast.
• 0:29
  SPEAKER_02: So big day today, Cattle on Feed Report.
• 0:31
  SPEAKER_02: But first we're going to start off with a little bit of the demand situation.
• 0:35
  SPEAKER_02: Then we're going to talk about supply before cattle on feed.
• 0:38
  SPEAKER_02: So let's get into choice.
• 0:40
  SPEAKER_02: I just had a fantastic steak the other night at Maury's, but what are the rest of the consumers thinking about choice here lately?
• 0:49
  SPEAKER_01: Yeah, there's there's been a lot of demand has been strong here, and we've seen that possibly wane a little bit post holidays.
• 0:58
  SPEAKER_01: Um, but we're dealing with a couple things here.
• 1:02
  SPEAKER_01: We saw the choice select spread narrow in, actually invert by a buck.
• 1:06
  SPEAKER_02: Yeah, that was weird, right?
• 1:07
  SPEAKER_01: Yep.
• 1:08
  SPEAKER_01: And that that would a wider than normal spread would indicate stronger demand.
• 1:13
  SPEAKER_01: Yep.
• 1:14
  SPEAKER_01: So we've we've lost a little demand maybe on that front, and maybe maybe we're not as strong on the demand side as we maybe could be.
• 1:23
  SPEAKER_01: Gotcha.
• 1:24
  SPEAKER_01: With these small kills.
• 1:25
  SPEAKER_02: Understood.
• 1:26
  SPEAKER_02: So at this point, Packer margins are okay, could be better kind of territory, but we're not closing anything down right now, right?
• 1:35
  SPEAKER_01: That would that would be my assumption.
• 1:37
  SPEAKER_02: Alright, because I mean if I look at it, cash cattle this week, 230s, um 63%, easy figuring, yeah, you know, of the of where cutouts at at 367, pretty much right around where we're paying cash cattle at.
• 1:51
  SPEAKER_01: Yep, and it would their their costs would be a little higher with our their slower hours and just more more overhead for the is the weather this weekend affecting anything kill-wise?
• 2:02
  SPEAKER_02: I mean, we keep having these weather events, but they're on the weekends.
• 2:05
  SPEAKER_01: Yeah, I don't I don't think it's gonna affect much.
• 2:08
  SPEAKER_01: They still gotta have four thousand head on the books for Saturday, so I don't think that's gonna affect it too much, but our kills are small.
• 2:15
  SPEAKER_02: Understood.
• 2:16
  SPEAKER_02: Um, let's talk about those kills a little bit.
• 2:18
  SPEAKER_02: How are we tracking this week?
• 2:19
  SPEAKER_01: So this week we're gonna kill about five hundred and thirty-five thousand is the estimate, and we last year we killed about five hundred and ninety-three thousand, so we're down ten percent below a year ago numbers.
• 2:32
  SPEAKER_02: So we were ten percent below at the beginning-ish, middle of Q4, probably of twenty-five, and then we were only six percent behind for a little while.
• 2:42
  SPEAKER_02: Yep, and and now we're kind of fading back again to a lower kill, aren't we?
• 2:46
  SPEAKER_01: Yeah, there would have been a there'd have been a tightening in the packer margins there.
• 2:50
  SPEAKER_02: They got pretty decent for a while, and then huge sell-off in cattle, they started paying up, killing more, makes sense.
• 2:57
  SPEAKER_02: Uh we're seeing it reverse here a little bit lately.
• 3:00
  SPEAKER_02: All right.
• 3:01
  SPEAKER_02: What else do you want to get into on the supply and demand side before we talk about cattle on feed, Jace?
• 3:06
  SPEAKER_01: Well, I guess the cash trade has been really impressive here.
• 3:09
  SPEAKER_02: All right, so let's talk about cash trade.
• 3:11
  SPEAKER_02: Today we reported around 235.
• 3:13
  SPEAKER_02: Did that end up getting traded?
• 3:15
  SPEAKER_01: Yep, 235 got traded, and that would be$2 higher than the top last week.
• 3:20
  SPEAKER_01: And$2 higher than the top would um that would be a that's pretty impressive on this low of kill numbers.
• 3:28
  SPEAKER_01: Really impressive.
• 3:28
  SPEAKER_01: I think I'm understating that.
• 3:30
  SPEAKER_02: Understood.
• 3:31
  SPEAKER_02: Understood.
• 3:31
  SPEAKER_02: What else do you got on the cash market?
• 3:33
  SPEAKER_02: Why why are we bidding up here for cattle all of a sudden again?
• 3:37
  SPEAKER_01: I just think, and it's it's partially demonstrated in the Catalon feed, but our numbers still aren't there.
• 3:43
  SPEAKER_01: We just don't have to.
• 3:45
  SPEAKER_02: I mean, it it would appear that heifer retention could be starting to take place, but not yet, right?
• 3:50
  SPEAKER_02: Right.
• 3:51
  SPEAKER_02: Let's talk about the Catalon feed report a little bit, slightly bearish a little bit.
• 3:55
  SPEAKER_02: Talk to me about it, what we saw today.
• 3:57
  SPEAKER_01: Yeah, it was it was kind of a lull you to sleep sort of a so no real big change going into Monday's trade rolling.
• 4:05
  SPEAKER_01: I don't think so.
• 4:06
  SPEAKER_01: The the catalon feed and marketing numbers were actually right at estimates to the to the decimal point there.
• 4:13
  SPEAKER_01: Placements were higher than the estimates were, but within the range of estimates.
• 4:18
  SPEAKER_01: So there was there was nothing too crazy on that report.
• 4:21
  SPEAKER_02: Understood.
• 4:21
  SPEAKER_02: Anything else you want to talk about on a catalog feed before we wrap up uh the session here today?
• 4:26
  SPEAKER_01: I don't think so.
• 4:27
  SPEAKER_01: I just did have a little note on feeders.
• 4:29
  SPEAKER_01: Feeders have softened just slightly.
• 4:31
  SPEAKER_02: In the cash market.
• 4:32
  SPEAKER_01: In the cash market, uh, mainly yesterday and today.
• 4:36
  SPEAKER_01: And we've seen the storm coming through the south is gonna disrupt some of those sales on Monday and Tuesday.
• 4:42
  SPEAKER_01: Like they're canceling them now.
• 4:44
  SPEAKER_01: Um so we could see we'll have to track that storm pretty closely because that could that could affect what they can do with their winter week down south.
• 4:53
  SPEAKER_02: And this is gonna be a big one because you're talking what, a foot to two foot of snow in the south, like Oklahoma, uh, through that area.
• 4:59
  SPEAKER_02: So I mean this is very irregular for them and below freezing temps.
• 5:03
  SPEAKER_01: Right.
• 5:03
  SPEAKER_01: I think they get down to one or two degrees.
• 5:07
  SPEAKER_02: So this will be a big deal uh when it comes to the weather here over the weekend.
• 5:11
  SPEAKER_02: Uh talk to me a little bit more just about what producers should know on the cash cattle, uh futures, everything here before we wrap up the show this week.
• 5:19
  SPEAKER_01: Yeah, I think the futures have they've been a little hesitant to run here now.
• 5:24
  SPEAKER_01: Um, you know, we saw we saw a pretty good excuse for it today with the higher cash, and the futures were still reluctant to run there, but I think I think relatively speaking, we're pretty we're at pretty high levels, as we all know, but I I think it's I think it's a good spot to hedge.
• 5:43
  SPEAKER_01: We've got a lot of uncertainty going into the spring here.
• 5:46
  SPEAKER_01: So getting coverage on, looking over the coverage you have on, seeing if there's any opportunities there is kind of where we're at.
• 5:52
  SPEAKER_02: We're still hanging below that gap.
• 5:54
  SPEAKER_02: I was curious going into the end of today's trade, if we would see any activity after this report, because before it, I think they were still a little hesitant to to maybe uh trade this cattle market here towards the end of the week.
• 6:06
  SPEAKER_02: Good news with cash cattle being a little bit stronger today, because we would we were wanting that, I guess, earlier in the week with the bad weather coming.
• 6:13
  SPEAKER_02: We're hoping we're gonna see it a little bit better, uh, more aggressive bids through earlier this week, and we didn't see that.
• 6:19
  SPEAKER_02: So I thought that was good to see that here Friday before the weekend.
• 6:22
  SPEAKER_02: And then uh also going forward Monday now that we've got this report behind us, it'll be interesting to see what kind of follow-through we have early next week.
• 6:30
  SPEAKER_01: It will be a couple technical things on the cattle.
• 6:33
  SPEAKER_01: We didn't we didn't trade above last week's Friday trade.
• 6:38
  SPEAKER_01: We didn't get above that high.
• 6:40
  SPEAKER_01: Um, and we did we did bounce off the 20-day moving average on all the feeder contracts.
• 6:45
  SPEAKER_02: Anything border wise, screw worm-wise, uh, to really chat about here this week.
• 6:51
  SPEAKER_01: No, there has been a little discussion about the storm moving through that could that could push the fly or keep the fly dormant down further south.
• 6:59
  SPEAKER_01: So that could help us on that end of managing it north of the border, but there's been no no real new news.
• 7:06
  SPEAKER_01: Just just the usual.
• 7:07
  SPEAKER_01: It gets talked about, but yeah.
• 7:09
  SPEAKER_02: Alright.
• 7:10
  SPEAKER_02: Well, thank you for your time today.
• 7:11
  SPEAKER_02: I appreciate it.
• 7:12
  SPEAKER_02: Thanks, Chase.
• 7:13
  SPEAKER_01: Thanks, Mike.
• 7:13
  SPEAKER_02: Thanks for listening.
• 7:14
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• 7:20
  SPEAKER_02: This week going forward, every podcast will have a video format available on YouTube as well to discuss charts and other things that we can show you while doing our podcast.
• 7:30
  SPEAKER_02: Thank you for listening.