Latest / Professional Ag Marketing Podcast / Screwworm is Here, Cattle Market Reaction | Cattle Market Talk June 5th, 2026

Transcript

Screwworm is Here, Cattle Market Reaction | Cattle Market Talk June 5th, 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.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_02: All right.
• 0:23
  SPEAKER_02: Today is June 5th.
• 0:24
  SPEAKER_02: I've got Jace with us here today.
• 0:26
  SPEAKER_02: How's it going, Chase?
• 0:27
  SPEAKER_02: It's going good.
• 0:28
  SPEAKER_02: We're going to talk about the cattle market today.
• 0:30
  SPEAKER_02: Obviously, a huge week.
• 0:32
  SPEAKER_02: We've got to cover a lot of things, but let's just talk about what happened this week.
• 0:37
  SPEAKER_02: Um, the the news of the screw worm finally getting over the border, Chase.
• 0:44
  SPEAKER_02: Tell me walk me through the process of what we saw this week in the cattle market.
• 0:48
  SPEAKER_01: Yeah, so we saw futures lower to start the week.
• 0:52
  SPEAKER_01: We kind of traded, we we'd been hearing about these cases in Mexico, and we traded we traded feeder cattle red before that, and before the announcement, which was Wednesday afternoon or Wednesday evening, that we got the official announcement.
• 1:06
  SPEAKER_01: But we've had it several times where we've had rumors that it's in the US before.
• 1:11
  SPEAKER_01: Um and but the pace that it was making its way north in Mexico was concerning this time.
• 1:18
  SPEAKER_02: You know, we'd hear about several cases within 30 miles of the border.
• 1:23
  SPEAKER_01: Yep.
• 1:23
  SPEAKER_01: And and it just it just kept getting closer.
• 1:26
  SPEAKER_01: I mean, we knew it was when, not if.
• 1:29
  SPEAKER_01: And so we traded it that way, and then we got it here Wednesday afternoon, kind of expected a sour trade on Thursday, and it acted more like a relief than a huge problem.
• 1:43
  SPEAKER_02: Because they technically found it Tuesday afternoon, right?
• 1:47
  SPEAKER_02: Yeah, Tuesday, and then Wednesday they confirmed it.
• 1:52
  SPEAKER_02: And then Thursday it was it was traded.
• 1:57
  SPEAKER_02: So the reaction though was interesting, wasn't it?
• 2:00
  SPEAKER_01: Yeah, limit limit higher was very interesting.
• 2:03
  SPEAKER_01: It was almost like it was just relief that that it's here.
• 2:07
  SPEAKER_01: We don't have to worry about what the news is gonna be like when it gets here, and it was maybe just you know, funds willing to buy this thing again, knowing that I mean the procedure isn't extremely clear, but it's a 12-mile radius that they're quarantined when they get it, 20 kilometers is what it says on the on the deal.
• 2:29
  SPEAKER_01: And um and it's just for 72 hours to to monitor everything.
• 2:35
  SPEAKER_01: So it's not an extremely, you know, we were worried about we were worried about state by state restrictions, you know, if they were going to restrict cattle from Texas to say Nebraska or Kansas, you know, didn't want the thing to take a leap.
• 2:50
  SPEAKER_01: Um, but that doesn't seem to be too much of a concern at the moment.
• 2:54
  SPEAKER_02: Let's talk about the futures reaction just a little bit deeper here.
• 2:58
  SPEAKER_02: We it it was a very interesting trade.
• 3:01
  SPEAKER_02: We we opened immensely lower yesterday morning on Thursday, and it within about a half hour, you could tell it's like, oh, we're coming back pretty good already.
• 3:10
  SPEAKER_02: And then about halfway through the trading session, it's like we're trading green right now on cattle.
• 3:14
  SPEAKER_02: This is incredible, and then closing limit up.
• 3:17
  SPEAKER_02: It's like uh a stronger reaction than what we anticipated for for friendliness.
• 3:22
  SPEAKER_02: And a big part of it, I think, is just thinking through the process in a fund manager's position.
• 3:28
  SPEAKER_02: I personally would say, well, fundamentals look good.
• 3:31
  SPEAKER_02: I want to own cattle, um, things looking up and up.
• 3:35
  SPEAKER_02: However, I don't want to buy because I'm worried about the screw worm steamrolling my position.
• 3:40
  SPEAKER_02: I getting in today, tomorrow we get screw worm, and we have a big sell-off, and I'm gonna have to eat that right away.
• 3:48
  SPEAKER_02: Now they don't have to worry about that.
• 3:50
  SPEAKER_02: You've talked about the process, procedures, kind of of what Rollins talked about last night going forward.
• 3:57
  SPEAKER_02: It seems, in your opinion, how do you think the process is set up in a friendliness aspect to the agricultural world?
• 4:04
  SPEAKER_01: I think I think it's still very friendly for cattle movement.
• 4:08
  SPEAKER_01: I don't think it's too I don't think it's too intrusive at all.
• 4:11
  SPEAKER_02: So we would likely expect more cases to be coming out about this.
• 4:15
  SPEAKER_02: Um the the thing to look forward to, I think that we have to watch carefully is is one just media's uh reaction to this and how they blow it up, right?
• 4:26
  SPEAKER_02: Yep.
• 4:26
  SPEAKER_02: Yeah, I think it'll be very important that we don't see media really go and have a frenzy with this thing.
• 4:34
  SPEAKER_02: Just keep a low profile.
• 4:36
  SPEAKER_02: Demand should be fine, right?
• 4:37
  SPEAKER_02: The last thing we want everybody to see this on is Fox News and everywhere else, right?
• 4:41
  SPEAKER_01: Right.
• 4:42
  SPEAKER_01: Public perception's gonna be huge.
• 4:44
  SPEAKER_01: We've seen beef demand that's not as strong as a year ago relative to to what what we saw for an increase um last year and what we've seen for a decrease in beef this year.
• 4:56
  SPEAKER_01: Um, but yeah, I I just think it's it's public perception.
• 5:00
  SPEAKER_01: It's the news stories.
• 5:02
  SPEAKER_01: Uh we've seen it, we've seen it a little bit, which is slightly concerning on the demand side is the the headlines just saying flesh-eating worm, and it's it's very tied to cattle, even though it's a mammal problem.
• 5:15
  SPEAKER_02: The other mammals don't seem too concerned about this at the moment.
• 5:18
  SPEAKER_02: Like obviously, the the hog side of the world, poultry, they they probably don't want to talk about it much personally, if you think about it that way.
• 5:26
  SPEAKER_02: But media-wise, it's mainly concerning cattle at this point.
• 5:31
  SPEAKER_02: Yep.
• 5:32
  SPEAKER_02: Production that it makes sense, right?
• 5:34
  SPEAKER_02: You're open, you're out and about, you have things like branding, dehorning, yeah, a lot more open wounds.
• 5:41
  SPEAKER_02: A hog in a building is a lot more secure, not as many open wounds, things like that.
• 5:46
  SPEAKER_02: So it obviously makes more sense to talk about on the cattle side.
• 5:50
  SPEAKER_02: But uh nonetheless, beyond that, the market, we've been anticipating this for probably we've had it around two years.
• 5:58
  SPEAKER_02: Probably thought we'd get it a year ago.
• 6:00
  SPEAKER_02: So they've had plenty of time to, for one, the market prepare for this.
• 6:04
  SPEAKER_02: We sold off$40 in the last month on August feeder cattle, so a pretty big, sizable position taken off of managed money here in the recent part.
• 6:14
  SPEAKER_02: And two, just obviously the government they've had time to prepare for this and a reaction to it.
• 6:20
  SPEAKER_02: So hopefully that means this isn't going to be that big of a deal.
• 6:23
  SPEAKER_02: But obviously, we're at record prices on cattle, and and uh we uh have to be prepared for this.
• 6:30
  SPEAKER_02: Any other final thoughts regarding screwworm market impact and what we need to watch going forward or what we should expect going forward with this?
• 6:39
  SPEAKER_01: The the guys in the sale barns weren't too concerned about it as of yesterday afternoon.
• 6:45
  SPEAKER_01: We saw a 375 daily index print.
• 6:49
  SPEAKER_01: So a pretty strong, pretty strong cash there.
• 6:51
  SPEAKER_01: We've still got August trading, you know,$20 below that daily number, quite a bit below where the where the seven-day index is as well.
• 7:01
  SPEAKER_01: And we did technically on that chart, we had a key reversal, uh a big one, one that you'd see in a textbook scenario.
• 7:10
  SPEAKER_02: Very much so.
• 7:11
  SPEAKER_02: All right.
• 7:11
  SPEAKER_02: Well, we've had some fun things to talk about on the cattle side from news uh news-wise this week.
• 7:19
  SPEAKER_02: What can you tell me about?
• 7:20
  SPEAKER_02: You'd mentioned cutout there a little bit.
• 7:22
  SPEAKER_02: We've been very sideways since March on the beef cutout, but it's at a very high level.
• 7:26
  SPEAKER_02: Uh, very soon here it's gonna be, it looks like if we keep trending this this way, we're gonna be at a very similar level to where we were a year ago.
• 7:34
  SPEAKER_02: I thought that was kind of fascinating after we talked about that this morning and just approaching that date.
• 7:39
  SPEAKER_02: Any takeaways from that?
• 7:41
  SPEAKER_01: We we're definitely running into resistance at the consumer level around that four hundred dollar mark.
• 7:48
  SPEAKER_01: So I don't I don't know what to take away exactly from that at the moment because we could still see a summer rally, but at the moment, 400 is a psychological resistance point for a lot of people.
• 8:00
  SPEAKER_02: For what it's worth, we uh we've seen that in the hog side as well.
• 8:03
  SPEAKER_02: Just can't really get above 100.
• 8:05
  SPEAKER_02: Uh, and uh normally by now we start to see that increase a little bit going into the summer.
• 8:10
  SPEAKER_02: So keep an eye on that too.
• 8:12
  SPEAKER_02: Other production fundamentals you think worth talking about today?
• 8:16
  SPEAKER_01: Not a not a whole lot.
• 8:18
  SPEAKER_01: I guess we've seen we've seen weights come down a little bit, um, but not not a lot, I guess.
• 8:24
  SPEAKER_01: Not a huge change there, still running well over year-ago levels there.
• 8:28
  SPEAKER_01: Um, the harvest is about 8% below a year ago, um, production's about three.
• 8:33
  SPEAKER_01: So still that the weights are making up for a big chunk of it, but we are we are seeing less U.S.
• 8:39
  SPEAKER_01: production, more imports.
• 8:41
  SPEAKER_01: So something to definitely watch there.
• 8:43
  SPEAKER_01: That the American consumer isn't isn't losing ability to buy beef.
• 8:49
  SPEAKER_01: There's still beef available, it's just more of it's imported, less of its domestic.
• 8:55
  SPEAKER_02: Interesting.
• 8:55
  SPEAKER_02: Anything else to wrap up on the cash market for activity you saw this week, a little bit friendlier?
• 9:00
  SPEAKER_01: Yeah, cash market was pretty strong.
• 9:02
  SPEAKER_01: The the guys trading the cash cattle sure know their leverage.
• 9:06
  SPEAKER_01: Um, they've been they've been holding steady here at, I mean, it's higher money than last week, about 257, 258.
• 9:14
  SPEAKER_01: A little bit of that was getting passed.
• 9:16
  SPEAKER_01: Um, and then there was some trade at those levels.
• 9:18
  SPEAKER_01: So it wasn't a real exciting cash week, but strong enough.
• 9:22
  SPEAKER_02: All right.
• 9:23
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• 9:30
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• 9:36
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• 9:42
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• 9:43
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