Latest / CattleUSA Daily / 308: Equities, Trade, Oil — and Everything Else Driving the Cattle Market Right Now with Dan and Samantha

Transcript

308: Equities, Trade, Oil — and Everything Else Driving the Cattle Market Right Now with Dan and Samantha · CattleUSA Daily

• 0:00
  In today's podcast episode, we are joined once again by Dan and
• 0:03
  Samantha and they are here to break down the cattle markets.
• 0:06
  What are we seeing on the board and as far as the live cattle
• 0:09
  market is going, we are discussing everything today and
• 0:12
  also how current events are playing a role and all of that.
• 0:15
  We are talking oil, we are talking equities, we are talking
• 0:18
  trade. We are talking all of the things
• 0:20
  that are currently affecting the cattle market and also hit on
• 0:23
  the grain market as well at the end covered by Dan.
• 0:27
  Before we hop into today's episode, if you're watching on
• 0:29
  YouTube, make sure if you take a second to hit that subscribe
• 0:31
  button. And like this episode.
• 0:32
  If you're watching on any of our other podcast platforms, make
• 0:35
  sure that you take a second to go follow the show rate and
• 0:37
  review it and share it with a friend.
• 0:39
  If you enjoyed today's episode, without further ado, let's go
• 0:41
  ahead and hear from Dan and Samantha.
• 0:47
  Welcome to the Cattle USA Daily Podcast, your go to source for
• 0:51
  the latest livestock markets, industry insights and the
• 0:54
  updates shaping agriculture today.
• 0:56
  I'm your host Lauren Moylan, a passionate advocate for
• 0:59
  agriculture, here to keep you informed and connected.
• 1:02
  Now let's dive into today's episode.
• 1:09
  Samantha, welcome back to the podcast once again.
• 1:12
  How has life in northwest Kansas been treating?
• 1:15
  Yeah. Not too bad, still haven't got
• 1:17
  any April showers but pressing through.
• 1:20
  We had a few sprinkles yesterday but then it moved on so still
• 1:24
  wishing for those rains. Yes, and I am still trying to
• 1:28
  push it out your way as much as humanly possible because I know
• 1:32
  how much you guys need it. But sending all the prayers for
• 1:35
  April showers northwest and just western Kansas in general
• 1:38
  because it's a little crunchy out there right now.
• 1:41
  Absolutely. Yeah, for sure.
• 1:44
  Well, what have we been seeing in the markets this past week?
• 1:48
  You know, overall they've been pretty friendly.
• 1:50
  There was a scare late on Tuesday there and there was a
• 1:53
  port that came out about possibly opening up a port and
• 1:57
  the live cattle imports July 7th, they're very specific about
• 2:00
  that date and it tampered with the feeder cattle prices a
• 2:03
  little bit there on futures. But then we found out later that
• 2:06
  it was unofficial and false reporting.
• 2:09
  So and we did see board, the board react off of that.
• 2:11
  Now whether it reacted off of that or different things, you
• 2:14
  know, I'm not 100% sure. I think it could have been maybe
• 2:17
  just a correction off of multiple up trending sessions
• 2:21
  and the market, you know, hedges are probably getting tired of
• 2:24
  these margin calls, but you know, teach their own whatever
• 2:27
  it was, we've we've went past it a little bit of chop in the
• 2:30
  market first part of the day here on Thursday.
• 2:32
  Hopefully we work out of that. But like I said in that markets
• 2:35
  have been pretty friendly pretty consistently since just before
• 2:38
  Easter. So can't complain too much.
• 2:40
  Very cash focused draw. It's pretty strong whether
• 2:43
  you're trading, you know, bats or bringing in a load of feeders
• 2:45
  to your local sale barn. I was running basis levels for
• 2:48
  our presentation this afternoon and comparing that to the
• 2:51
  national cash index levels and it's just mind blowing how these
• 2:54
  calves are selling so much higher even than the cash index.
• 2:57
  In comparison, these lightweight calves have been on fire and of
• 3:00
  course they don't go into their go into the index.
• 3:02
  But lately, even these 7 weights, they've been exploding
• 3:05
  and that carry has carried the cash index to crazy levels.
• 3:08
  Even just from Thursday of last week to Friday of last week.
• 3:11
  At day's time, it went up $7.21. But you know, overall, we
• 3:16
  really, really needed it. I think we still need it.
• 3:18
  I mean, cattle are breaking records, a lot of records in
• 3:21
  different areas. Don't get me wrong, I hate to
• 3:23
  even throw out a number because they change so much week over
• 3:26
  week, sometimes even day-to-day. But like I said, we need it.
• 3:30
  Those operating costs, they aren't cheap.
• 3:32
  You know, just in northwest Kansas, our cost of production
• 3:36
  has probably went up 25 to 30% just within the in the last four
• 3:39
  to five years. So you think if we didn't have
• 3:42
  some of these prices to offset a, a big portion of that, it
• 3:45
  could get real ugly real fast. So just looking at last week,
• 3:48
  some cash cattle, it ranged from 240-5250 free on board a mostly
• 3:53
  248 late in the week. Kansas, you know, we had some
• 3:56
  early trade action on Monday. It was steady to a buck lower
• 4:00
  off last week's 248 high in the South.
• 4:02
  So still trading at a discount. April live cattle futures, it
• 4:06
  really seems like the Packers are are pretty reluctant dent
• 4:09
  either at 2:50 or past that 250. Those who did after that 250
• 4:14
  last week, I heard they were all regional Packers, none of your
• 4:17
  BIG4. So I think it'll be really
• 4:18
  interesting to see, you know, where cash levels fall towards
• 4:21
  the end of this week, just dealing with low volume coming
• 4:25
  off of light trade last week and then all of those things.
• 4:28
  So still keeping an eye on equities.
• 4:30
  We talked a little bit about things going on with Iran last
• 4:33
  week. That was kind of the hot topic
• 4:35
  things that were affecting the market in a good way, but still
• 4:39
  watching them. Negotiations did fail with Iran
• 4:41
  over the weekend. So blocked the Strait of the
• 4:44
  Hormuz, shut off their business. They've China shifted their
• 4:47
  business to the United States. You know, Trump's pretty much
• 4:51
  pinched off every ounce of micro sized leverage that Iran has to
• 4:56
  keep this thing going. So hopefully, you know, these
• 4:59
  talks that they're talking about might come up here in the near
• 5:02
  future, hopefully. So it's amount to something.
• 5:06
  But hello, Dan. Hi.
• 5:07
  Dad, sorry it's not been mid sentence.
• 5:11
  That's OK. We were just talking to see if
• 5:13
  you were going to come on or not, but yeah.
• 5:15
  Hello. Welcome.
• 5:16
  Back. Yeah, yeah, my bad.
• 5:19
  Welcome. We're happy to have you, Mr.
• 5:22
  Mountain Man. I've got a plan.
• 5:24
  I'm not shaving the beard until the corns planted.
• 5:27
  I'm getting tired of the rain. I know you guys don't want to
• 5:30
  hear that, but we are fully drowned out up here not touching
• 5:33
  it. And we can't can't trim up until
• 5:35
  cash stalls, right? Can't touch anything.
• 5:38
  I'm still wearing the same underwear.
• 5:40
  I pray for your wife. Yeah, yeah, got to leave it
• 5:42
  alone. She's Louise.
• 5:44
  Well, Samantha was just giving us the rundown on equities and
• 5:49
  everything going on there. You don't.
• 5:51
  You're not coming in in the middle of the podcast this time
• 5:54
  with a rally hat or any crazy attire this time, but we're
• 5:59
  happy to have you nonetheless. Thank you.
• 6:01
  Yeah. Appreciate you letting me come
• 6:03
  on here every now and then. We need to figure out a lock
• 6:05
  function on this Samantha, so that we there's one day that Dan
• 6:09
  wants to come on and we just lock him out.
• 6:11
  Sorry, Dan, not are you eating bacon on a cattle podcast?
• 6:17
  You want some Lauren? I can't have any, you know that.
• 6:21
  Yes, I do. You and John must have had a
• 6:25
  nice little talk, huh? I cannot confirm or deny ever
• 6:28
  anything. Everything we do here is
• 6:30
  entirely confidential. Interesting.
• 6:32
  Interesting take. Well, I hope you're enjoying
• 6:34
  your bacon. I will go enjoy my beef bacon,
• 6:37
  thank you very much. I don't need anything to do with
• 6:40
  the pigs, Samantha. I'm allergic to pork if you
• 6:42
  missed that. Really.
• 6:43
  So yes. So I can't have pork and John
• 6:48
  has declared war on me and Dan is his closest ally so wow.
• 6:53
  OK, what happens if you eat pork?
• 6:55
  I'm not anaphylactic, my body just can't digest it properly.
• 6:58
  OK, something with like the fat, protein, something or other pork
• 7:03
  can. I just do not get along.
• 7:05
  Does that make you like Jewish? They can't eat pork, can they?
• 7:07
  I think it's Jews that can't eat pork.
• 7:09
  Yeah, I'm not Jewish. I'm a very proud Christian.
• 7:15
  All right, I'll leave that alone.
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  But I can have sympathy for the Jewish people who do not get to
• 7:21
  have pork as either. But I've have, I feel like I
• 7:24
  have found a very good alternative in beef, bacon and
• 7:28
  otherwise. I'm not missing anything.
• 7:30
  So. Beef bacon is very good, I
• 7:32
  agree. Did you know beef jerky has
• 7:34
  sugar? They're selling no sugar beef
• 7:37
  jerky at the store. I didn't even know jerky had
• 7:40
  sugar. Some of it, yeah.
• 7:42
  In the flavoring, yeah. Like in the seasoning mix they
• 7:45
  put some sugar in and some of them a lot of seasoning mixes
• 7:48
  that you get from the store, like for steak seasoning mixes,
• 7:50
  some of them have sugar in them too.
• 7:52
  Yep. Fun packed salt, pepper, bacon
• 7:54
  and beef. Dan Oh, Dan Well, Samantha gave
• 7:59
  us the rundown on what she thinks markets are doing right
• 8:01
  now and all of the things. Dan, what do you think markets
• 8:05
  are like right now? I'm going to go with Samantha's
• 8:07
  take because I have no idea what's going on right now.
• 8:10
  No, I'm just kidding. We've got to be objective about
• 8:16
  this market at all times. You know, open up the computer
• 8:18
  every morning. We got to look at the market.
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  Is it a buyer? Is it a Celt?
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  I look objectively at this market.
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  Two things are screwed up. The basis in the cash back
• 8:27
  cattle market in the spreads. So both are screwed up.
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  Old thing was first goes the bases, then goes the spreads and
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  goes the market. Well, here we are.
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  It's living that out. Today.
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  You look at June at 2:47 last week, we trade 248 cash.
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  June is really, really overpriced and needs a
• 8:45
  correction. Not saying the party's over
• 8:47
  forever, but it needs a correction.
• 8:48
  It to say the least, just to have a normal seasonal basis,
• 8:51
  which is typically positive this time of year.
• 8:54
  April parked at 2:50. Right now we're carrying a 2,
• 8:58
  you know, $2.42 and a half cent spread between April and June.
• 9:02
  So that's too damn narrow in my opinion.
• 9:04
  Your end of the delivery period and you've got a negative basis
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  against the April. None of this stuff is normal.
• 9:10
  Markets are doing irrational things that are irrational.
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  That's what some might think is irrational prices and it's just
• 9:17
  the correction. And does that mean I'm of the
• 9:19
  opinion we're going to new eyes next week after this corrects?
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  I'm not in that opinion. I think I think we could and we
• 9:26
  could actually go to some pretty insane highs here in the next, I
• 9:29
  would say 6 if all the stars aligned.
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  But as of right now, I'm missing a pretty big star aligning on
• 9:35
  the demand side of this thing. I'm not seeing the volume
• 9:38
  getting moved at retail and restaurant.
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  I'm not seeing prices screaming higher.
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  I'm not seeing the consumer wanting more more of our product
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  at these prices. So that's where I struggle.
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  Once again, there's somebody yelling at their screen as
• 9:51
  they're watching is sit thinking that demand is, you know, all
• 9:54
  time crazy high. And we have strong demand.
• 9:56
  Yeah, we have stronger demand than maybe we did in 201617 or
• 10:01
  18 or 19. But is it strong enough to
• 10:03
  demand to hold cattle prices where they're at?
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  As of yesterday, the slaughter has been strong.
• 10:08
  So it's been good enough. But they are stacking you up.
• 10:12
  The boxes are starting to stack up.
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  So maybe if we don't see the prices tick higher because of
• 10:18
  strong demand in the next three weeks, we need it pretty bad.
• 10:22
  Then maybe we start seeing those kill cuts and maybe the market
• 10:25
  starting to price that in today. So that's my big fear.
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  Obviously, it's a futures market we're trying to look into and
• 10:30
  predict and hedge against a potential downturn.
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  I think that's what the market's trying to do here.
• 10:36
  My opinion? Any thoughts on that, Samantha?
• 10:39
  No, I agree. I think, you know, we're seeing
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  a lot of resistance at these levels, especially on fat
• 10:45
  cattle. Like I said, the Packers really
• 10:48
  fight in that 250. They really don't want to even
• 10:51
  give 250 or past that. I think really the big deciding
• 10:56
  factor is what we get towards the end of this week and then
• 10:59
  the market's going to play off of that going into next week.
• 11:02
  Yeah, Dan, before you hopped on, Samantha was talking about
• 11:05
  equities and oil, all of the things that we're seeing there
• 11:09
  and its potential effect on the cattle market and things like
• 11:13
  that. Do you have any thoughts?
• 11:15
  Last I saw heard, did we just sign a new bill?
• 11:18
  We're going to start pumping money, money into this economy
• 11:21
  again. So that's bullish commodities,
• 11:23
  that's inflationary again, if that's actually going to happen.
• 11:26
  So it usually doesn't happen overnight, but it's they're
• 11:29
  trying to stabilize, support this market here, get some money
• 11:31
  flowing again. Yeah, I equities.
• 11:35
  So we're back to the highs. Pretty impressive oil.
• 11:38
  I'm not sure I want to come on here and try to come up with
• 11:41
  something intelligent to say to follow Donald or President Trump
• 11:46
  because he could come out later and everything I just told you
• 11:49
  is useless. Just.
• 11:50
  Yeah, I'm glad to see we've got control of that straight.
• 11:53
  I think that is going to probably get these oil prices in
• 11:56
  check. And I think that US domestic
• 11:58
  consumer needed that. There was too much griping about
• 12:01
  gas prices. We all know they don't fall as
• 12:04
  fast as they rise. But if if we keep this trend,
• 12:08
  I'm saying in the energy markets, I I think we could see
• 12:11
  that that price correct a little bit as we come into summer when
• 12:14
  we need it lower, you know, vacation season.
• 12:18
  I just hoping we make it to vacation season without having a
• 12:22
  big meltdown. So I think some of that, like I
• 12:24
  said, pumping money into the economy again, I I think had
• 12:27
  something to do with that. So that's my stance for today.
• 12:31
  We're going to leave it at that. Well, lucky for you Dan, this is
• 12:33
  going out same day. We're recording this on
• 12:35
  Thursday, it's going out on Thursday.
• 12:36
  So everyone just needs to listen to this on Thursday before
• 12:40
  anything hits the news cycles and changes anything that we're
• 12:45
  talking about because Lord knows one word is said and everything
• 12:49
  is gone to shit. So.
• 12:50
  Yeah, 100% and it's tough. You know, these markets are
• 12:53
  moving so fast. Yeah, you, we all hear that
• 12:56
  volatility word every other day in these markets, but they move
• 13:00
  so fast that anything that any of us say right now is he can be
• 13:04
  useless in 10 minutes. So you know, obviously I said
• 13:08
  it's, it's a futures market we're trying to price in the
• 13:10
  future and then figure out where the market belongs in the
• 13:12
  future. But information changes by the
• 13:14
  2nd. That's what makes it fun though.
• 13:16
  Something like that. Something like that.
• 13:19
  We are the world's the biggest gamblers, maybe not biggest, but
• 13:23
  one of them and the cattle industry and.
• 13:26
  Fun fact I just read last night it just came out I believe over
• 13:29
  half of. I don't remember the stats
• 13:31
  exactly so don't quote me on this, but over half of men aged
• 13:36
  20 to 30 have a sports betting app on their phone.
• 13:40
  That seems crazy. I believe that.
• 13:42
  I would 100% believe that. They should just come play.
• 13:46
  The futures market, the hogs and cattle market, I mean.
• 13:49
  I think they're like playing with five, ten, 20-30 dollars.
• 13:54
  Not. Not as much as it would take to
• 13:55
  play in the cattle market. OK, All right.
• 13:58
  Yeah, OK. All right.
• 14:00
  But yeah, it's it's all a great big gamble right now.
• 14:04
  You know, buying feed your cattle right now that you're on
• 14:06
  break even at 260, that's a gamble.
• 14:08
  Buying a lightweight calf to kick out on grass that needs to
• 14:11
  see 380 as a yearling? That's a gamble.
• 14:14
  Buying a 5 or $6000 cow right now, that's a gamble.
• 14:17
  Everything we do in life is a gamble.
• 14:19
  And I'm and I'm glad Americans bet on the come.
• 14:22
  I'm glad we're optimistic enough to push forward.
• 14:25
  But holy moly, it's a gamble right now.
• 14:27
  It is for sure. Samantha, anything else on the
• 14:30
  cattle market that we haven't hit on today that you wanted to
• 14:33
  touch on before I make Dan talk about the grain market?
• 14:37
  We've got a three letter word that might be some people's
• 14:40
  biggest enemy coming up on Friday.
• 14:43
  Catalan feed report 4 letter word.
• 14:47
  All right. So yeah, Catalan feed report
• 14:49
  coming up on Friday. I think that's something to be
• 14:52
  watching as we go into the end of the week, something to just
• 14:54
  keep in mind, you know, from February 1 to mid-May, the
• 14:59
  border was open to live Catalan ports from Mexico.
• 15:03
  So that is going to factor into the analyst estimates when
• 15:07
  they're comparing year over year.
• 15:09
  So far, some of the early estimates that I've seen and I'm
• 15:12
  sure they're going to change a few times over before the actual
• 15:15
  report is released, but they've got Catalan feed as of April one
• 15:19
  at 99.7% of a year ago. Biggest number to watch is
• 15:23
  placements. That was another huge number to
• 15:25
  watch last month as well. Placements, they've got them
• 15:28
  pegged at 93.3% versus last year.
• 15:33
  Keep in mind, last year we were 5% over the year prior, so 5% /
• 15:38
  2024. So is that in line maybe are we
• 15:42
  that much back from last year? I don't know.
• 15:45
  We had some pretty high volume sales in March.
• 15:48
  There was a lot of panic selling it seemed whether it was panic
• 15:51
  selling to get him to, you know, market because the market had
• 15:54
  tanked, whether it was panic selling to get him to the sale
• 15:57
  barn because the market went the other way.
• 15:59
  And we had some pretty high volume sales.
• 16:01
  But at the same time, a lot of these sale barns aren't
• 16:03
  operating weekly like they usually do.
• 16:04
  It's every other week to, you know, get enough cattle to get
• 16:08
  some of these bigger buyers in. I think it could go either way.
• 16:11
  I guess we'll see kind of how it plays out.
• 16:13
  Marketing's, they had those at 93.6% average of analyst
• 16:17
  estimates. Yeah, I mean, that's maybe in
• 16:19
  line. I'm not going to try and guess
• 16:21
  it personally, but just looking at how it might be bearish or
• 16:24
  bullish on the market go either way.
• 16:26
  Slaughter's been really, really low, right, All four weeks of
• 16:29
  last month. It was pushing 6070 thousand
• 16:33
  head under a year ago. So we all know Slaughter's low,
• 16:37
  but I think the biggest thing is going to be to watch if
• 16:40
  placements exceed marketing then buy how much.
• 16:43
  Getting cattle backed up when we have backed slaughter up this
• 16:46
  much I think is never not a concern.
• 16:48
  Something to be watching as we close out the week here.
• 16:51
  For sure, Dan, Great markets. You know, a month ago pretty
• 16:55
  much everybody was dry and I mean everybody.
• 16:59
  Now all of a sudden some of us are dry, some of us are
• 17:01
  drowning. I think the market is trying to
• 17:03
  price in this planting seasons, weather, you know, you, you've
• 17:08
  got pockets that it's April 16th.
• 17:10
  Why are we talking about preventative plant already?
• 17:13
  But they're talking about it. I'm calling bullshit for now.
• 17:17
  You know, you change the forecast, you dry them up,
• 17:19
  they'll be out there and they'll they'll plug 90 million acres of
• 17:22
  corn in and five in the first five days of May if the forecast
• 17:25
  allows us. It's hard for me to get bullish
• 17:29
  grains here, oil below $100 a barrel.
• 17:32
  How can I get $5 corn bullish? Use this rally, get those puts
• 17:36
  on at this point, tell some calls up there, 550 I guess
• 17:39
  would be my recommendation. Comes with risk of course, but
• 17:44
  yeah, just call us. We can explain it, tell you what
• 17:47
  it looks like to your operation. Just I don't I don't think I
• 17:52
  want to trade the weather headlines as of right now.
• 17:54
  I mean, if, if some jet streams change, my neck of the wood
• 17:58
  dries out and the people in the droughts all the sudden are
• 18:01
  catching rain, that's a possibility.
• 18:03
  Maybe it doesn't happen then maybe we've got a weather market
• 18:07
  to trade. But I, I don't think I want to
• 18:11
  put all my eggs in one basket and be bullish, you know, be
• 18:15
  bullish. Like we're actually not going to
• 18:17
  have a sorry, we're going to have a short crop.
• 18:19
  Farmers are too good in this country.
• 18:21
  We're going to have a good crop. So we'll see what happens.
• 18:24
  Mother Nature wins every time, though.
• 18:26
  We will indeed, we will see what happens.
• 18:29
  Anything else that we haven't hit on today as far as the
• 18:32
  cattle market is concerned that we need to touch on?
• 18:36
  Hog market, we have not talked about hogs.
• 18:38
  Hogs have been on. Enjoying that bacon?
• 18:42
  Yeah. Yeah.
• 18:44
  Anybody watching, go buy some pork chops.
• 18:46
  Go buy some ribs. Buy some bacon.
• 18:48
  Hog producers need a little love, too.
• 18:50
  I don't deny that they do need love, they're just not going to
• 18:53
  get it from me. Not because I don't love them,
• 18:55
  but because I can't eat their product.
• 18:57
  So my husband would love to give them some love and affection.
• 19:01
  Unfortunately he suffers alongside of me so.
• 19:05
  All right. Sorry, Sorry, not sorry.
• 19:09
  So glad that you and John are able to bond over this.
• 19:13
  So I'm so happy that you guys are able to able to build and
• 19:16
  develop this relationship over war against Lauren.
• 19:19
  Just know that Samantha and I over here strategically planning
• 19:24
  against you too as well. Who said I talk to John?
• 19:27
  Maybe I'm an avid podcast watcher, listener.
• 19:30
  OK, maybe you are. Maybe you are, but I, John
• 19:34
  didn't tell me he was going to call Dan as soon as he got off
• 19:36
  the podcast. So I think your sources have
• 19:39
  sold you out already. They've been leaked.
• 19:41
  They've been leaked. So all right.
• 19:44
  You guys have fun with your little petty squabbles, and
• 19:47
  Samantha and I are over here building our arsenal, so have
• 19:50
  fun, all right? Have fun with that.
• 19:52
  All right? All right.
• 19:54
  All righty, guys. Well, Dan, Samantha, thank you
• 19:57
  once again as always for coming on the podcast.
• 20:00
  I appreciate your time as always and coming on and giving us the
• 20:04
  breakdown on everything we're seeing as far as the markets go,
• 20:07
  to all of our listeners out there, everything that Dan
• 20:09
  talked about, about getting a hold of the team.
• 20:11
  Talking to everyone, I've got all of the links down in the
• 20:13
  show notes down below where you can get a hold of the team
• 20:16
  directly to Samantha or Dan and get a hold of them and talk
• 20:20
  about your options as far as coverage goes on everything.
• 20:24
  And Samantha, thank you once again to all of you listeners.
• 20:26
  We will see you all next time on another episode.
• 20:28
  Have a good one y'all.