Latest / Professional Ag Marketing Podcast / Iran War Impact | Cattle Talk March 5th, 2026

Transcript

Iran War Impact | Cattle Talk March 5th, 2026 · 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_01: All right, today is March 5th.
• 0:22
  SPEAKER_01: I've got Jace with us here today.
• 0:23
  SPEAKER_01: We're going to talk the cattle market.
• 0:24
  SPEAKER_01: How's it going, Jace?
• 0:26
  SPEAKER_01: It's going good.
• 0:26
  SPEAKER_01: All right.
• 0:27
  SPEAKER_01: Well, we're going to cover a few very fun things.
• 0:29
  SPEAKER_01: First, we're going to talk about the war, how that's been moving the markets here a little bit, what all is going on, and how it ties back to agriculture.
• 0:37
  SPEAKER_01: We're going to talk a little bit about numbers, just kind of where we're sitting at right now on total supply, what we look like going forward, talk about the cash a little bit here in the near term.
• 0:48
  SPEAKER_01: And then we're going to talk just about margin opportunities here in this cattle market.
• 0:52
  SPEAKER_01: So let's get into it.
• 0:54
  SPEAKER_02: Yes, sir.
• 0:54
  SPEAKER_01: All right.
• 0:55
  SPEAKER_01: Well, we're looking at uh a very impressive, a very impressive trait uh trading range right now, I think, on this cattle market.
• 1:03
  SPEAKER_01: When I look at some of the things we've been trading, Jace, it's vulnerability, it is volatility.
• 1:08
  SPEAKER_01: We have seen the stock market crazy ups and downs today, here, Thursday afternoon.
• 1:14
  SPEAKER_01: We've seen the equity markets down about 90 points on the SP 500.
• 1:18
  SPEAKER_01: Meanwhile, cattle's been holding in quite well.
• 1:21
  SPEAKER_01: And one of the main themes here I wanted to talk about is that the money hasn't left yet on either the equity markets or cattle through this uh recent development in Iran.
• 1:31
  SPEAKER_01: And one of the things I think worth mentioning is that we've got near record long positions in in the cattle market, which Cade can pull up here in just a moment for us.
• 1:41
  SPEAKER_01: So you can see there that the feeder cattle, for example, record long 37,000 contracts.
• 1:47
  SPEAKER_01: We're at 18,000 right now.
• 1:48
  SPEAKER_01: Live cattle, 119 versus 156 for a record position.
• 1:53
  SPEAKER_01: So they've they're a little bit off their highs, but they're still holding on to a pretty large amount of long positions relative to normal.
• 2:00
  SPEAKER_01: And then index funds as well.
• 2:02
  SPEAKER_01: They're still holding on to a pretty big bundle of them.
• 2:05
  SPEAKER_01: But when I look at the vulnerability of this cattle market right now, Jace, yeah, we're looking at a situation where you could see a lot of money come out of the stock market, for example, and uh you're looking at a situation where that money hasn't really headed to the sidelines in a big way yet on this cattle market.
• 2:21
  SPEAKER_01: So managed money's been resilient.
• 2:23
  SPEAKER_01: It's held around here through some of this volatility and vulnerability through the Iran war situation now over the past week mainly.
• 2:30
  SPEAKER_01: Uh I wanted to just see what your take is on money flow and how concerned it is or needs to be in this cattle market for the next couple weeks.
• 2:38
  SPEAKER_02: Yeah, I think it's very apparent.
• 2:40
  SPEAKER_02: Like we saw, especially late last week, um, and Monday of this week, and the days that the days that the outside markets have moved a lot, so has cattle.
• 2:51
  SPEAKER_02: And it the equities have been range bound largely, and so you haven't seen a flight of money.
• 2:58
  SPEAKER_02: You haven't seen, you haven't seen them crash through the hundred-day moving average or anything there.
• 3:02
  SPEAKER_02: But I think it definitely gives us a warning that we need to be paying attention to outside movement.
• 3:09
  SPEAKER_01: And it it's very apparent because it's not just looking at cattle versus SP.
• 3:13
  SPEAKER_01: I think it's when you look at every grain market, every oilseed market, every livestock market, basically, besides the hog market, it looks like so cattle and feeder cattle, equities, energies, currencies.
• 3:26
  SPEAKER_01: When I look at every single one of those, two days ago, for example, we had all those trading in a certain certain particular direction.
• 3:34
  SPEAKER_01: Then yesterday, when we traded a little bit more, not as concerned about war, it traded the exact opposite in every single one of those categories.
• 3:43
  SPEAKER_01: And that's something very apparent to us that they're trading all the same thing.
• 3:47
  SPEAKER_01: If they trade all the same thing one day and then the next day, they're trading in the exact opposite of that in every one of those, whether it be up or down for them, anyways, it all made sense relative to the risk uh tied to the war, for example.
• 4:01
  SPEAKER_01: It's very apparent that's what they're trading.
• 4:03
  SPEAKER_01: And so far this week, it's very hard for me to track down a moment in in this week's trade on corn, soybeans, cattle market, where we were like, oh, we had this type of information on the supply or demand side that moved the market at any given point this week.
• 4:19
  SPEAKER_01: It's all been basically risk on, risk off, what's happening with the war and some of the situations there.
• 4:25
  SPEAKER_01: So it that's been the the week of the that's been the trade of the week, basically, for all of these commodities.
• 4:31
  SPEAKER_02: Yeah, we've we saw that on cattle yesterday, you know, the equities were finally green, they were green by a ways, cattle was able to cattle were able to run, and yeah, it's just it's just been tied very tightly.
• 4:44
  SPEAKER_02: We saw grains down yesterday, and then today again, equity's down, cattle can't really go anywhere.
• 4:50
  SPEAKER_02: Corn's up big, oil's up big, just the money flow is very apparent.
• 4:56
  SPEAKER_01: Now, when I start to look back in time, I'll have Cade pull up the chart here on live cattle going back to show, kind of illustrate how cattle reacted on futures back in June.
• 5:07
  SPEAKER_01: So if you recall, Jace, the last time that Iran and Israel really got in a pretty heated battle this last June, between about June 13th and the 24th, after they had the ceasefire, what did cattle do at that point?
• 5:20
  SPEAKER_01: Well, that would be that little blue circle there.
• 5:23
  SPEAKER_01: We saw a straight sell-off.
• 5:25
  SPEAKER_01: It rallied into the start of the war, and then it sold off there over that 10-day time frame or so in that blue circle.
• 5:32
  SPEAKER_01: So you can see it just really it pulled back through that little stretch, but it didn't last that long.
• 5:37
  SPEAKER_01: So the pullback didn't last that long.
• 5:39
  SPEAKER_01: Then cattle went back to trading their normal fundamentals.
• 5:42
  SPEAKER_01: So last time around, it was pretty bearish thing.
• 5:44
  SPEAKER_01: We saw a little bit of a bearish thing here in the past couple days as well, as we were able to see a little bit of a pullback.
• 5:51
  SPEAKER_01: Now, the last probably three days, we've actually found some pretty good appreciation in the cattle as as we've looked at uh some of these uh equities and stuff hold in maybe a little bit better than we thought.
• 6:02
  SPEAKER_01: Feeder cattle maybe taking it a little bit worse, though, I would say.
• 6:05
  SPEAKER_02: Yeah, feeder cattle have a couple things working against them.
• 6:08
  SPEAKER_02: Now, the poor margins on the on the feedlot side, poor margins on the packing side.
• 6:16
  SPEAKER_02: And you know, you've got you've got feedlots maybe closing down, not stocking as full, but you also on the on the feeder cattle side, you've got a component there that hadn't been visible for a while, the corn.
• 6:31
  SPEAKER_02: Corn is largely a non-factor below 450.
• 6:35
  SPEAKER_02: Now it's above 450, and you're starting to see it like today.
• 6:39
  SPEAKER_02: Live cattle were slightly green, feeder cattle were down pretty good, and grains were up.
• 6:45
  SPEAKER_01: You haven't seen that impact for quite a while here, is corn's been relatively cheap, especially when you start looking at the worth of cattle.
• 6:51
  SPEAKER_01: The higher priced cattle is, the less corn matters, so so to say.
• 6:55
  SPEAKER_01: And now we've started to see that appreciate or at least get some scare into it.
• 7:00
  SPEAKER_01: So at this point, that is something to watch as well, Jace.
• 7:03
  SPEAKER_01: Um, are is there anything else on the margin side you want to uh want to contribute to here on either the Packer margins or anything like that?
• 7:12
  SPEAKER_02: Yeah, I think the Packer margins will come into focus here over the next few weeks as they've they've improved significantly over the past week and a half.
• 7:23
  SPEAKER_02: We've seen cutout rallying pretty sharply.
• 7:26
  SPEAKER_02: We've seen choice go from you know in the 360s up to the upper 380s right now.
• 7:33
  SPEAKER_02: They're buying cattle.
• 7:34
  SPEAKER_02: Last week they were buying some of their cattle at the in the low 380s on the dress side, in the low to mid 240s on the cash side.
• 7:42
  SPEAKER_02: So starting to see that improve significantly.
• 7:45
  SPEAKER_02: That changes the conversation maybe a little bit from a plant closing down to more, you know, maintaining or or how they're gonna maintain these small kills.
• 7:55
  SPEAKER_02: You know, they've got their overhead costs at a 32-hour week and just gets a little tougher to manage on that front.
• 8:02
  SPEAKER_01: Yeah, 364 mid-360s on choice cutout here recently.
• 8:07
  SPEAKER_01: Now it's rallied into the front of March over 388 here today.
• 8:11
  SPEAKER_01: So a pretty good appreciation out of the choice cutout recently.
• 8:14
  SPEAKER_01: That's really probably helping those packer margins.
• 8:17
  SPEAKER_01: Cash, do you have any insight here over the next uh few weeks?
• 8:20
  SPEAKER_01: I mean, when I look at cash, it's been occurring very late on Fridays.
• 8:24
  SPEAKER_01: Um, you know, one of the other things is we had a pretty good hole in the month of February that was anticipated when we got there.
• 8:30
  SPEAKER_01: We've definitely been killing less cattle uh, you know, week over week or year over year.
• 8:35
  SPEAKER_01: What do you think we're looking like going forward here in through the month of March and April, Jace?
• 8:40
  SPEAKER_02: I think it'll depend a lot on how the packer decides to manage it, if they'll continue to kill this few of cattle, or if they'll, or if with the margins improving, if they'll start to ramp up a little bit here, but we're definitely running into some inventory.
• 8:56
  SPEAKER_02: I don't know if it's burdensome, but we're running into inventory now.
• 9:00
  SPEAKER_02: I mean, we've got bigger cattle in the north here.
• 9:03
  SPEAKER_02: Our weights aren't going down, so it's just a matter of how long this lasts.
• 9:08
  SPEAKER_02: And I I think I think we could have cattle for a while here, especially with the smaller kills.
• 9:13
  SPEAKER_02: Um, but I think you could I think you could start to see that that supply dwindle a little bit when you get to the end of April, beginning of May.
• 9:21
  SPEAKER_01: The Packer has been very responsive in times past uh here recently.
• 9:26
  SPEAKER_01: I would argue in the short spurts where we saw Packer margins improve, they did ramp up pretty aggressive for that short little time frame, didn't they?
• 9:33
  SPEAKER_02: Yeah, they did.
• 9:34
  SPEAKER_02: And that was very apparent in October.
• 9:36
  SPEAKER_02: Yep.
• 9:36
  SPEAKER_02: And yeah, they just seem to they seem to want to kill them when it's when it's not too bad of a not too bad of a margin.
• 9:44
  SPEAKER_02: I mean, even then it didn't it didn't ever really get positive.
• 9:47
  SPEAKER_02: It just got better.
• 9:48
  SPEAKER_02: And they were willing to they were willing to ramp them up.
• 9:51
  SPEAKER_01: Now, just to wrap up our conversation on the cattle side today, beyond recommendations, any comments about the war and kind of the stage that we're sitting in here today with Iran.
• 10:02
  SPEAKER_02: Yeah, I guess for the cattle side, I think it's pretty important that we're that we're maintaining our coverage or looking at what needs to be done because we we see a risk here.
• 10:15
  SPEAKER_02: As of now, it's not no no boots on the ground, sort of a deal.
• 10:19
  SPEAKER_02: But if that does become the scenario, could drag on for longer than anticipated and could could change things a little bit.
• 10:26
  SPEAKER_02: It could go from just a little bit of a sell-off to if you got the equities to get out of their range, you could you could put a bit of pressure on it.
• 10:35
  SPEAKER_01: It's it's a tale of two worlds here for Trump because he loves loves low fuel prices.
• 10:41
  SPEAKER_01: So he's really shooting himself in the foot here.
• 10:43
  SPEAKER_01: Fuel prices have been ramping up very aggressively here, up 50 cents even daily here lately at the pump.
• 10:50
  SPEAKER_01: And uh so that consumer-wise is not friendly to what he normally likes.
• 10:55
  SPEAKER_01: He likes cheap fuel.
• 10:56
  SPEAKER_01: So it in his stance for that, he probably wants this to be pretty quick.
• 11:01
  SPEAKER_01: I don't think he wants this to last too long.
• 11:03
  SPEAKER_01: If it lasts over a certain amount of time frame, he's gonna have to get Congress approval, which I don't think would be a problem.
• 11:08
  SPEAKER_01: But uh at this point, I think they're gonna want to try to make this a pretty quick ordeal from the looks of it.
• 11:13
  SPEAKER_02: Yeah, it seems like it.
• 11:14
  SPEAKER_01: Yeah.
• 11:15
  SPEAKER_01: All right.
• 11:15
  SPEAKER_01: Well, thank you for your time today.
• 11:17
  SPEAKER_01: I appreciate it.
• 11:17
  SPEAKER_01: Everybody out there, it's been a fantastic few weeks here on the YouTube channel.
• 11:22
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