Latest / Professional Ag Marketing Podcast / Lula to the White House | Cattle Market Talk May 7th, 2026

Transcript

Lula to the White House | Cattle Market Talk May 7th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Cattle Talk Podcast.
• 0:06
  SPEAKER_00: Your weekly breakdown of cattle market fundamentals, key news, and the insights shaping the industry.
• 0:13
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: All right.
• 0:22
  SPEAKER_01: Today is May 7th.
• 0:24
  SPEAKER_01: I've got Jace here with us today.
• 0:26
  SPEAKER_01: How's it going, Jace?
• 0:27
  SPEAKER_01: It's going good.
• 0:28
  SPEAKER_01: Awesome.
• 0:28
  SPEAKER_01: Well, let's start talking about these cattle futures.
• 0:31
  SPEAKER_01: We had a just a wild trading session here over the past uh day or so here, Jace.
• 0:37
  SPEAKER_01: But talk me through what you've seen with cattle futures here over the over the week so far.
• 0:42
  SPEAKER_02: Yeah, so last week we put in contract highs and then kind of set back from them.
• 0:48
  SPEAKER_02: Um we've been trading very consistently between two trend lines, one on the way up and one towards the bottom end.
• 0:55
  SPEAKER_02: And it like today's trade down at the bottom bounced right off of it, right off of that support and closed above the 20-day moving average on the on the August futures there.
• 1:07
  SPEAKER_02: So kind of interesting trade there.
• 1:10
  SPEAKER_02: But started out in the morning kind of thinking that today was just some money flow.
• 1:15
  SPEAKER_02: And then towards the end of the day, we started hearing some maybe possible fundamental reasons why this thing was lower.
• 1:21
  SPEAKER_01: Interesting.
• 1:22
  SPEAKER_01: It uh what were some of those fundamental reasons that you were thinking of for uh today's action?
• 1:28
  SPEAKER_01: Any any headlines worth mentioning here today?
• 1:30
  SPEAKER_02: Yeah, so the DOJ has been actively investigating the Packers, and that's been they've been broadcasting that wide, I guess.
• 1:40
  SPEAKER_02: Rollins has been having a few speeches on it.
• 1:43
  SPEAKER_02: So it doesn't, there's not a lot of clarity around exactly what's going on there or what they're what they're trying to accomplish, but that is in the headlines and it's it's kind of bearish.
• 1:53
  SPEAKER_01: I gotcha.
• 1:54
  SPEAKER_01: Interesting.
• 1:55
  SPEAKER_01: Um what what other headlines do you got going on in the cattle space right now?
• 1:59
  SPEAKER_01: You think that are are moving things?
• 2:01
  SPEAKER_02: Yeah, so Trump met with President Lula of Brazil this afternoon, and just kind of kind of wondering if there that's bleeding into the cattle or has a has an impact on these cattle just with the way that just with the way that um futures traded towards the end of the day and our beef imports coming from there.
• 2:21
  SPEAKER_02: I gotcha.
• 2:21
  SPEAKER_01: Interesting, interesting.
• 2:23
  SPEAKER_01: Um yeah, besides President Lula and the the White House visit there, any other headlines that really moving things before we start talking about some of the other interior fundamentals here?
• 2:35
  SPEAKER_02: I don't think too much other than cash was strong this week, but not not really a headline, just cash above 260 was impressive.
• 2:42
  SPEAKER_01: Okay, so cash above 260 here this week, last week 257 or so, you thought?
• 2:49
  SPEAKER_02: Yeah, last week top of 257.
• 2:52
  SPEAKER_02: Um, this week started out at 255 and then headed higher.
• 2:56
  SPEAKER_02: Um, we we got 250, 256 bid yesterday and then up to 260 and a little bit higher this week.
• 3:05
  SPEAKER_01: I gotcha.
• 3:06
  SPEAKER_01: Nice.
• 3:07
  SPEAKER_01: Um, if I'm looking at some of the other things happening right now, let's talk about the import side of the equation.
• 3:14
  SPEAKER_01: Uh what can you tell us about some of the recent data we've had on imports?
• 3:18
  SPEAKER_02: Yeah, so we've we're importing a significant amount more beef than we were last year.
• 3:23
  SPEAKER_02: So about 19% of our total beef production is imported now, which is a dramatic increase from last year.
• 3:31
  SPEAKER_02: Last year was about 11 for the year.
• 3:33
  SPEAKER_02: And and actually, we we talked about um the quotas from South America and those those areas had been in the in the earlier stages of this uptrend, they would fill their quota right away and then not really send much more because the tariff deincentivized disincentivized them from from going um from coming to our market after that.
• 3:56
  SPEAKER_02: Whereas now now we've got um such high prices here relative to the rest of the world that that they're willing to send it even after the the meat's been tariffed.
• 4:07
  SPEAKER_02: So we're we're seeing a more consistent import of beef.
• 4:11
  SPEAKER_01: I gotcha.
• 4:13
  SPEAKER_01: Interesting.
• 4:13
  SPEAKER_01: The um uh cutout, how do you think that's been uh reacting here as of uh real recently?
• 4:20
  SPEAKER_02: Cutout's been flatter than I I think that it should be, but yet we are in an uptrend.
• 4:27
  SPEAKER_02: Like we're in a seasonal uptrend here.
• 4:29
  SPEAKER_02: It's been higher, but relative to what cash is doing, it's cash almost seems a little unsustainable compared to the compared to the cutout.
• 4:39
  SPEAKER_02: I mean, they're paying 405 in the meat for cattle, and they're getting 389 on the choice.
• 4:44
  SPEAKER_01: It's just a little early, isn't it?
• 4:46
  SPEAKER_01: Don't you think that here a couple weeks out, start to see that early seasonal climb on cutout?
• 4:52
  SPEAKER_01: Don't you think we'll see something soon?
• 4:54
  SPEAKER_01: I mean, it's not like the numbers appear to be there at this point, Jace.
• 4:58
  SPEAKER_01: What do you think on time here?
• 5:00
  SPEAKER_02: Right.
• 5:00
  SPEAKER_02: It would it it will be interesting to see because what we what we have with the imported beef, we'll have to see how demand reacts to that.
• 5:10
  SPEAKER_02: You know, if if that's enough different or lesser quality than what we're used to here, that we see a little bit of a demand drag there, or or if it just got high enough.
• 5:20
  SPEAKER_01: This week's trade, do you think that's revolved mainly around headlines so far this week here?
• 5:26
  SPEAKER_01: It kind of seems like it.
• 5:27
  SPEAKER_01: Yeah, it seems like most of the egg space, like today, for example, most egg uh commodities were trading lower.
• 5:35
  SPEAKER_01: And uh I I would argue that the outside markets have still had a pretty good hold on the agricultural space here this week so far.
• 5:43
  SPEAKER_01: Going forward, I mean, supply is still down, as long as the American consumer holds on, stays strong.
• 5:49
  SPEAKER_01: It would appear that fundamentals suggest that things are still okay in this cattle market to keep moving higher, but the trade likely is gonna get a little impatient if cutout can't head higher here, isn't it?
• 6:00
  SPEAKER_02: That's that's definitely true.
• 6:02
  SPEAKER_02: And just kind of looking at the numbers over the past few years, the the cow guy, uh this is a little bit rougher math, but the cow guy's got about 96% of the increase in the in the cattle market here.
• 6:15
  SPEAKER_02: And the the feeders got a little bit of an increase, and then the packers lost quite a bit.
• 6:21
  SPEAKER_02: So it there's a shift, there's a shift in the balance there between the three.
• 6:26
  SPEAKER_02: And the Packers losing money, I I I don't think that'll happen forever, you know.
• 6:31
  SPEAKER_02: And so that that is definitely a risk.
• 6:34
  SPEAKER_02: But if you look at if you look at our supply and just look at supply, that would paint a more bullish picture.
• 6:41
  SPEAKER_02: You know, we're we're struggling to retain heifers with the dryness out west.
• 6:45
  SPEAKER_02: And there's a lot of things on the supply side that would make it bullish, but there are there are so many risks on the demand side and on the packing side.
• 6:53
  SPEAKER_02: And I mean, because in reality, we're trading live cattle, we're not trading um the cutout where that can we saw it during COVID be over 400 bucks on choice and cash was at 88.
• 7:06
  SPEAKER_02: So there we we've just got to remember that we're trading live cattle and that there's there's still risk in that chain.
• 7:12
  SPEAKER_01: Well, the southwest United States still plenty dry, western U.S.
• 7:16
  SPEAKER_01: still plenty dry.
• 7:17
  SPEAKER_01: Haze's getting a little bit more expensive here lately.
• 7:19
  SPEAKER_01: The cows are getting cheaper uh in that direction, it sounds like as well.
• 7:23
  SPEAKER_01: So uh at this point, watch the weather a little bit up front.
• 7:27
  SPEAKER_01: Obviously, any headlines that are moving and bigger picture, the the supply side just isn't changing, fundamentals don't seem to be changing, and we're heading into an okay time of the year uh typically for cattle producers.
• 7:39
  SPEAKER_02: Yep.
• 7:40
  SPEAKER_02: I would have I would have one one word of caution.
• 7:43
  SPEAKER_02: We are in a time right after April futures expired here that the futures don't have to really care about fundamentals for a little while here.
• 7:52
  SPEAKER_02: They can they can do their own thing while while cash heads higher.
• 7:55
  SPEAKER_02: We're used to seeing a positive basis this time of year.
• 7:58
  SPEAKER_02: So just be a little careful on the on the risk management side, making sure that you're still aware that you know a lot can a lot can change and change the futures when the when the cash at present seems really good.
• 8:11
  SPEAKER_01: Well, basis was a wild ride today, especially, wasn't it, with the activity we had.
• 8:15
  SPEAKER_01: Absolutely.
• 8:16
  SPEAKER_01: All right.
• 8:17
  SPEAKER_01: Well, thank you for your time.
• 8:18
  SPEAKER_01: Everybody out there, uh, please click on the link in the description below to check out our daily market commentary and other marketing info there as well.
• 8:26
  SPEAKER_01: Thank you for joining us, Jace.
• 8:27
  SPEAKER_01: We really appreciate it.
• 8:28
  SPEAKER_01: Go to our website at Professional Marketing if you need anything else.