Latest / CattleUSA Daily / 288: Why the Cattle Market Is Still Climbing and What’s Really Behind the Swings

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288: Why the Cattle Market Is Still Climbing and What’s Really Behind the Swings · CattleUSA Daily

• 0:03
  Welcome to the Cattle USA Daily podcast, your go to source for
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  the latest livestock markets, industry insights and the update
• 0:10
  shaping agriculture today. I'm your host, Lauren Moylan, a
• 0:14
  passionate advocate for agriculture, here to keep you
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  informed and connected. Now let's dive into today's
• 0:20
  episode. In today's episode with Dan and
• 0:26
  Samantha, we are breaking down the cattle market, what we have
• 0:29
  been seeing on the board and in the live cattle market over the
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  past week. Dan also gives us a really great
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  rundown on what we are seeing in grains and we're talking about
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  export markets, We're talking about the war with Iran and what
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  is actually affecting the cattle market, what's affecting the
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  grain markets, what isn't. We're talking gas prices, we're
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  talking trading on the board, all of these different nuances
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  that are affecting the cattle market.
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  And we also hit on the JBS plant in Greeley, Co.
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  It's officially shut down right now for the strike.
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  And what has it actually done to the cattle market?
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  Or maybe what hasn't it done to the cattle market?
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  We talk about every single one of these things in today's
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  podcast episode with Dan and Samantha.
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  But before we hop in, if you're watching on YouTube, make sure
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  you go hit that the subscribe button and go like this episode.
• 1:18
  And if you're watching on any of our other podcast platforms,
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  take a second to go follow the show, go right and review it and
• 1:24
  share it with a friend. We really appreciate all the
• 1:26
  love and support that you guys give us as audience members
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  across all platforms as we continue to grow and evolve this
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  podcast. Without further ado, let's go
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  ahead and hear from Dan and Samantha.
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  Dan, Samantha, welcome back to the podcast.
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  How's this cold front been treating us the past week?
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  Not enjoyable, but winter is almost over, so we're winning
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  now. Just going to give Mother Nature
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  the middle finger here at the end of the week and say you got
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  nothing now, yeah. It only lasted about a day here.
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  We had like 60 mile per hour winds.
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  I think with the wind gusts it was a real feel of 10°.
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  And then now we're back in the 70s and the rest of this week.
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  So who were all? Talk about a roller coaster that
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  we've been on. But like you said Dan, it's
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  almost over. So we will take it.
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  We'll take it where we can get it.
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  And we don't have any KU basketball to talk about today
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  or anything like that. So it's it's a win in my
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  department. I'm having a great day, but how
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  are the markets? Doing just just great nice
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  little rally this week on cattle and even got hogs to turn
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  higher. So that's that's optimistic.
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  Yeah, cattle on feed this week is something worth noting.
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  Don't know if we're kind of pricing some of that in or if,
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  if ahead of Mondays strike beginning we were pricing in,
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  you know the potential of the strike, you know on the move
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  down. Long story short, we're headed
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  higher. It's looking good at the moment.
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  Yeah, absolutely. Everyone's talking about these
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  record highs. Let's talk about that record
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  volatility. I mean, Oh my God, just been
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  such a whiplash market. We were a lot softer last week.
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  We were softer cash, fats, cash feeders, futures.
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  I think the only thing that wasn't softer was grains.
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  And we've already seen a correction the first part of
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  this week. Like Dan said, both feeders and
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  futures Monday and Tuesday auctions were both higher,
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  10/15/20 dollars higher. Some of some of them are even
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  seeing record highs that they saw back first part of years.
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  Big correction, didn't last too long.
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  I know a lot of people are pointing to the war in some form
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  or fashion. I mean, yeah, it goes about
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  saying it's normal to see shifting markets during a time
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  of war. Like I said, goes without
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  saying, whether it's oil stocks, whatever.
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  We actually seen stocks up yesterday that maybe helped give
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  us a little bit of a boost. A lot of people say that the
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  cattle market falls the stock market and I definitely there's
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  a lot of stock to it. There's a lot of truth in it,
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  but sometimes there's just no rhyme or reason.
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  But yesterday they were both up. So that's great.
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  Really in this case, I think when we're looking at war,
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  short, short term economic pain in this scenario is definitely
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  much needed to redevent that as bigger issues long term with
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  Iran. So get that taken care of and
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  out of the way. I'll leave it at that.
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  Obviously, we're seeing the plant strike at JBS still being
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  a little bit of a pinch point. I mean, heck, we played this out
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  for six weeks now, which is honestly insane.
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  I mean, union workers. Big headline.
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  They officially started striking Monday morning.
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  Realistically, the plant was dark all last week, so didn't
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  really change much. Markets corrected themselves
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  Monday after, in my opinion, overreacting to it for weeks,
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  much longer than they needed to. But last week especially, just
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  another one of those prime examples of rumors being worse
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  than reality. So hopefully the markets played
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  that hand out for a while. We'll kind of see what happens.
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  Another big headline. JBS broke ground on $150 million
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  expansion at their their plant Cactus.
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  Just Texas. Everyone's been saying it's not
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  really a great time for strike. I, I don't really know how much
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  JBS is really going to be willing to negotiate.
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  I don't think they're hurting too much with this plant.
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  I mean, it's not like they're losing any market share.
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  They're either rerouting them to cactus or Grand islands.
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  Like I said, I don't know how eager JBS is going to be to
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  negotiate. We'll see what see what happens.
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  Cash fats lost about 5 bucks in last week's trade, but then they
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  actually leveled off at the end of the week.
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  A lot of times you see, you know, these cattle feeders puke
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  up lower trade in the beginning of the week and and we pretty
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  much have kind of set the trend for the rest of the week.
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  But they leveled off last week, which was good.
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  Settled around two 34236 on a live basis, $8 lower dress at
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  372. But like I said, they're leveled
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  off. The Packers only traded 35,500
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  or 300 head somewhere in between there.
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  So maybe that prompts some competition in this week's cash
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  market. Yeah, for sure.
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  I agree and echo all of the things that you said about
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  volatility because holy cow, has it been week in the cattle
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  market just from everything that has happened, rumors, rumors,
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  rumors, rumors left and white right on everything.
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  Samantha, you said it perfectly and you called it I think last
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  week or the week before you were like, I guarantee you this is
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  going to be another one of those situations where the market is
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  going to react more based off of the thought of it than it is
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  going to react based off of the actual action of it.
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  And I think that we have just kind of seen that once again.
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  And I mean, it's the same story being told over and over again.
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  We saw it quite a bit last year and it's holding true as we
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  continue to go into 2026 as well.
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  Well, I agree 100%, yeah. I mean, you look at the kills
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  yesterday, 109,000 that's awesome.
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  You know, if we could hold that through the end of the week and
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  get some Saturday's kills, you know, they're yeah, you're
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  right. They're shifting cattle.
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  You know, Hiram, tell us in they're going to pick up some
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  slack too on Saturday. So, and they're not the only
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  ones. Tyson's picking up some Saturday
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  kills too. So all things.
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  And it looks like we might kill 54550 this week.
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  You've ever read the newsletter? Kills are everything to me.
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  They always are. You can market yourself into a
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  hole or you can backlog cattle. All depends on those kills,
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  those slaughter rates. So super, super pumped about
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  that. Think the cash market has some
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  footing here this week. We burned up a lot, most to all
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  of those March contracts and there were a lot written and
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  then now we're actually seeing they're starting to pull some
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  April contracts early. All things in, all things
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  considered, if we get through those contracted cattle, that
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  gives more leverage back to the cattle feeder in the cash
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  market. So little optimistic both with
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  the kills working higher and burning up some of those
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  contracts. Combine that, you know, boxes,
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  ribbon Packers are profitable. Yeah, boxes are ripping because
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  of that slower slaughter the last couple weeks and the fear
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  around Greeley and all this, you know, retailers get bogged down
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  on that fear too. So that's part of it.
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  But either way, we're going out, we're contracting meat in that
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  22 to 90 day window at a higher price because boxes are now
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  about 400. So if we can get those contracts
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  going into our peak grilling season by June, that's a great
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  thing. If it helps sustain our market
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  longer, we have less fear for that time frame.
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  Pretty often that we talk about, you know our mention that it
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  might be easy easier to predict markets in the next 90 days than
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  it is, you know, in six months or in 12 months when your cattle
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  are actually going. That's because we know a little
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  bit more about these markets, you know, what's going on with
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  the beat, what's going on with the seasons.
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  So, yeah, a lot of things to look forward to.
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  The weather is improving. You know, I think we fire up
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  some drills. Yeah, Samantha was right.
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  Cattle love falling equities. And it's it's a lot of times
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  just that money flows. So if if traders out there or
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  investors get nervous about the stock market, are they really
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  going to think that the consumers are going to plow
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  into, you know, record high beef price?
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  So we'll just pull out of all of it, shift it together.
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  It's pretty common that moves that way.
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  Same thing with oil. Oil spikes up, gas prices get
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  high, maybe some of that, you know, discretionary spending
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  from the consumer is now a problem for beef.
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  So hopefully, you know, Trump talks and acts like Iran's going
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  well. I haven't been over there to
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  prove or confirm or deny, but I hope he's right.
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  And here in the next couple weeks, that conflict can be
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  solved or or at least slow down and take the volatility out of
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  the market and then we could go back to trade fundamentals here
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  and that's spring drilling weather.
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  Yeah, like Dan said, I mean, we broke $4.00 on choice cuts.
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  It's pretty early to be seeing this jump in prices already.
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  But yeah, like Dan said, I mean, maybe we're getting that
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  running, running start end of June especially.
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  Crazy to see jumps like this and the choice cut out, breaking
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  $4.00 in mid March, especially in the midst of Lent.
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  And we're not in prime grilling season yet, so pretty crazy.
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  Just looking at the technicals. I mean, technically speaking,
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  wholesale beef prices, they've already up 9% from the start of
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  the year. I mean that's 23% more than this
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  time of year ago. So like I mean, it goes without
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  saying those aren't record-breaking numbers, but
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  it's very unseasonal for this time of year.
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  Hopefully that gives us a running start end of June.
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  Hopefully we don't peak too early.
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  Hopefully we just see those higher highs.
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  Obviously, the kill cut has a lot to do with it.
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  We're seeing 70,000 head kill cuts and that's just outrageous.
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  But I do think demand is definitely there to back it.
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  So I mean, so just be watching for, I mean, so many times we
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  see beef prices skyrocket and live cattle do the opposite.
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  Last few days they've moved pretty much in tandem.
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  Hopefully we see that continue. Like Dan said, we're burning
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  through some of that contract cattle.
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  A lot of these Packers are going to be coming back up to the
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  plate probably towards the end of this week.
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  Hopefully see some higher bids and see just upward trends from
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  here. Yeah, for sure.
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  It's encouraging as we go into spring to kind of see some of
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  that demand creep back in. And even though we've been in
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  what's considered kind of a little bit of our offseason as
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  far as beef demand goes, it's encouraging to see that the
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  consumer is still showing up at that counter and that they are
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  still choosing beef. Even though it's maybe not at
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  the volume we've seen in the past, it's still at high
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  numbers. And especially as we go through
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  the rest of the Linton season and things like that and we move
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  into spring and spring grilling. I know at our household, we are
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  itching to get the grills back out and fired up again.
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  There's been a couple times my husband's gone out and braved
• 11:02
  the winter cold outside. But I know I'm, I'm ready to
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  start using that Blackstone again, ready to start using that
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  grill again. And so I know that that will
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  definitely push our consumers back to kind of hopefully help
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  that demand. And like you said, Samantha,
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  it's encouraging that we have also seen the live market follow
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  that price of beef for our consumers as well recently.
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  Dan, what are we seeing on anything else in the market?
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  A lot of chopping grains, obviously, same thing, trading
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  oil, trading stocks, you know, grains go down if stocks go up
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  can be pretty common. A lot of this is well nearly all
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  of this is the Iran conflict causing the uncertainty in the
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  market. So that really encourage a lot
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  of grain producers use this gift and get some hedges in place.
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  You know we've been doing a lot of three-way strategies given
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  some top side left open. You know it is early to be
• 11:54
  hedging off all 100% of our grain for the year, but you
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  still need to protect these prices because fundamentally
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  this is not a fundamental driven market.
• 12:02
  Our 2.12 billion bushel carry out in the corn is is a problem,
• 12:06
  yes. Do I think the USDA is going to
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  lower that? Absolutely, probably get down to
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  a two point O 5 for two point O 8, but even then and it's still
• 12:13
  not justifiable $5 corn. Could it get there?
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  Absolutely. Coming back to the volatility
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  and depending what oil does, is oil going to go to 121 thirty?
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  That's a possibility. If that happens, we want some
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  upside potential. So, you know, reward this rally
• 12:29
  in the green side because this can disappear.
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  You know, by the end of next week it could all be gone.
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  But at the same time it is early leaves outside open a little bit
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  on on some of those bushels. Yeah, hog market like I said
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  that bounced yesterday. Still optimistic hogs supplies
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  are tight, demand is good, exports have been really, you
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  know, really good on the year as a whole.
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  So super optimistic hogs still think there's a a chance to push
• 12:54
  towards that one 10120 summer, summer prices again.
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  So looking forward to that. It'd be nice if we could get
• 13:03
  rolling again. It's showing signs like we've
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  got some stress here on the charts and and could point lower
• 13:10
  if it closes well on the end of this week.
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  I think we've got some opportunity maybe push closer to
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  those Preak events that we haven't seen in a while.
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  So it's use the use the rally, that's for sure.
• 13:22
  Definitely, I could not agree more.
• 13:24
  What are we kind of seeing on our export markets right now?
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  You know, exports in the grain market is have been good other
• 13:32
  than cotton really corn exports super strong.
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  Obviously Mexico need more corn if they're going to feed all
• 13:37
  those cattle. Soybean exports, great.
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  If China actually takes everything they've committed,
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  it's this mid March time frame always puts me on edge because
• 13:49
  if we have all these sales and we don't get them turned into
• 13:51
  shipments down your markets go river open here around the
• 13:55
  corner, we're going to start floating some of these grains.
• 13:58
  We really need to see those turned into shipments.
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  If we don't get them, that's a big problem.
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  If China cancels their beans and you know, there's still enough
• 14:06
  corn out there that exports didn't take care of all of it.
• 14:09
  But Long story short, we need the shipment.
• 14:11
  So it'll be interesting here. We're competing with South
• 14:15
  America, you know, full swing on harvest down there.
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  There's been some turmoil down there with China.
• 14:20
  So that may have been the reason why they bought so many beans
• 14:23
  from us is they were planning to do that.
• 14:25
  But the last thing I heard was Target will actually reopen the
• 14:29
  export facility and they're sending more beans to China.
• 14:32
  Again, it's that time of year where our competition is cheaper
• 14:35
  than us and it's easier to go to South America.
• 14:37
  So once again, get some protection in place on this
• 14:40
  rally, just in case China decides to cancel those beans.
• 14:44
  Absolutely. Any other thoughts on the market
• 14:47
  in general or anything else that we need to hit on today?
• 14:49
  March Madness, obviously go Hawks and if if the Hawks get
• 14:53
  knocked out right away, rock chop Jayhawk.
• 14:56
  OK, and we can end this podcast passed right there.
• 14:59
  Actually, ladies and gentlemen, if you don't see Dan on next
• 15:03
  week, you know that he ticked Lauren off just beyond measure.
• 15:08
  Gets me worked up. Dan.
• 15:10
  Samantha, actually, you know what?
• 15:11
  No, Samantha, thank you for your time today.
• 15:14
  I appreciate you and your loyalty to the state of Kansas
• 15:19
  in the proper way. Twelve of our listeners, thank
• 15:21
  you for listening to another episode of the Cattle USA Daily
• 15:24
  Podcast. Do not Go Cheer for KU, and We
• 15:27
  Can Be Friends. Thank you and have a great day.