Latest / Professional Ag Marketing Podcast / Placements Came in Low - Post Cattle on Feed

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Placements Came in Low - Post Cattle on Feed · 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.
• 0:21
  SPEAKER_01: All right.
• 0:22
  SPEAKER_01: Today is June 18th, and I've got Jace back with us here today to talk about the cattle market.
• 0:27
  SPEAKER_01: How's it going?
• 0:28
  SPEAKER_01: It's going good.
• 0:29
  SPEAKER_01: Good.
• 0:30
  SPEAKER_01: Well, we had a Catalon feed report this afternoon.
• 0:32
  SPEAKER_01: There is no trade tomorrow on Friday.
• 0:36
  SPEAKER_01: So uh keep that in mind here.
• 0:38
  SPEAKER_01: We've got a three-day weekend following up a Catalon feed report.
• 0:42
  SPEAKER_01: So uh also no LRP or LGM tonight.
• 0:46
  SPEAKER_01: Jace, take it away.
• 0:47
  SPEAKER_01: What did you see out of the Catalon feed report today?
• 0:50
  SPEAKER_02: Placements um being below the average estimates.
• 0:54
  SPEAKER_02: That was the one that stuck out to us.
• 0:56
  SPEAKER_02: The other two on feed number was right at the right at the estimates, and marketings were slightly below the range, but a pretty narrow range there.
• 1:05
  SPEAKER_02: Um so no real surprise other than placements being at the low end of the range.
• 1:10
  SPEAKER_02: Um that could I mean that's that's friendly.
• 1:13
  SPEAKER_01: Talk about a wide range of estimates on the placements, 89 to 104, and we came in about 90 right on the bottom end of it.
• 1:20
  SPEAKER_01: So they needed all of that range to say the least.
• 1:23
  SPEAKER_01: I would just say on placements, that one historically it's very hard.
• 1:27
  SPEAKER_01: If they're within 6% of the number expected, it seems like they do an okay job with it.
• 1:32
  SPEAKER_01: So uh that one they can miss pretty big on.
• 1:35
  SPEAKER_01: That placements number lately has been a little bit bigger, hasn't it?
• 1:38
  SPEAKER_02: Yep, we've seen more calves being pulled, not sent to to grass or that sort of thing, and put right in the feed yard, whereas now we're we're seeing that dun dwindle a little bit, and not sure if that's if that's because we're completely running out of those calves or if we're just or if we're returning to sending a few of them to grass.
• 1:58
  SPEAKER_01: So it's a three-day weekend.
• 1:59
  SPEAKER_01: Is the market gonna care about this news by the time Monday morning at 8.30 comes around, or is this gonna be old news?
• 2:06
  SPEAKER_02: It might a little bit, but I think the bigger story is gonna be if cash can do anything between now and then.
• 2:13
  SPEAKER_01: True.
• 2:13
  SPEAKER_01: Not much cash trade here.
• 2:15
  SPEAKER_01: We've had a low slaughter week.
• 2:17
  SPEAKER_01: It looks like it'll be low for the rest of the week here as well with the holiday.
• 2:21
  SPEAKER_01: So uh will we see that create more demand from the retailers, it looks like, or not?
• 2:26
  SPEAKER_01: That's kind of the question, right?
• 2:28
  SPEAKER_02: I think that's the question and that's the hope, really.
• 2:31
  SPEAKER_02: Um, I think if we I think if we don't, that's a little concerning because we are starting to probably build a little bit of supply on the live cattle side.
• 2:41
  SPEAKER_02: Um, so we'll see we'll see what that does over the next, I would say, two weeks or so.
• 2:47
  SPEAKER_02: Gotcha.
• 2:48
  SPEAKER_01: Well, um, in general here, uh fat cattle, we had a$15 cutout rally with no real pullbacks.
• 2:57
  SPEAKER_01: Uh, you saw a pretty good live cattle futures rally here along with it.
• 3:02
  SPEAKER_01: No real pullbacks.
• 3:03
  SPEAKER_01: What uh what do you think?
• 3:05
  SPEAKER_01: Are do the bears have something here the last couple days, or do you think it's gonna be one of those things where we open up pretty strong next week here for the trajectory of this cattle market?
• 3:16
  SPEAKER_02: It wouldn't surprise me if we had another eight to ten dollar pullback in this thing.
• 3:20
  SPEAKER_02: It's just we we can't seem to get the box beef above four hundred.
• 3:26
  SPEAKER_02: So we've got we're importing a lot of beef, and people like to talk about that, but we aren't importing much choice.
• 3:34
  SPEAKER_02: We really can't.
• 3:35
  SPEAKER_02: We we produce the choice and higher beef.
• 3:38
  SPEAKER_02: So it's um that's a little bit interesting that we're not getting that to rally and had looked at that a little bit, like the spread between choice and select being getting as wide as it is, um, as a good sign.
• 3:53
  SPEAKER_02: We were seeing demand for the expensive cuts again, the ribs, especially, and you know, maybe maybe we're running into some headwinds here at the top.
• 4:02
  SPEAKER_01: Choice to select tier, true choice versus select looks like it in my opinion, too.
• 4:08
  SPEAKER_01: I'm seeing a little bit of slugging sluggishness in the lower middle class below.
• 4:16
  SPEAKER_01: Um, it does look like select here taking a little bit off faster than what choice probably is, spreading those two out, just probably concerns from the consumer.
• 4:25
  SPEAKER_01: I think it it lines up very well.
• 4:27
  SPEAKER_01: Then you couple that with the we're importing a lot of that as well recently.
• 4:32
  SPEAKER_01: Uh Trump administration probably doesn't care a lot about a steak necessarily, but ground burger especially, they want to try to fix that price.
• 4:41
  SPEAKER_01: Um, one of the other things I wanted to talk about was just you you mentioned numbers, but what about the production side?
• 4:48
  SPEAKER_01: Because weights have been really heavy as well.
• 4:50
  SPEAKER_01: Um, yeah, how do you view overall production here?
• 4:53
  SPEAKER_02: Yeah, weights, weights running heavier could could get us at a spot where we'd have about the same amount of beef production in the next two months or so as we did last year, maybe even a little bit more.
• 5:06
  SPEAKER_02: So that's that's interesting, and that's a little bit based on the cattle on feed numbers and all of that.
• 5:12
  SPEAKER_02: So we'll see if that if that comes to fruition.
• 5:16
  SPEAKER_02: But um we would we would probably be looking at similar to a little bit more beef production than a year ago in say August.
• 5:24
  SPEAKER_02: And that could, you know, that that's not you need demand to be stronger to keep us where we are.
• 5:31
  SPEAKER_01: Not really the best close the last two days.
• 5:33
  SPEAKER_01: I'd say if you just pulled up a chart like August live cattle, for example, kind of a rough close the last two days, near six-week highs.
• 5:42
  SPEAKER_01: Uh I'll be very interested as well how the trade reacts to this next week and any obviously any cash news over the weekend here.
• 5:51
  SPEAKER_01: What else do you got on the cattle side that you'd like to cover this week that you find relevant, Jace?
• 5:57
  SPEAKER_02: Um, the show lists have been a little bigger this past week.
• 6:01
  SPEAKER_02: Um, so there's more more cattle that they want to trade on the cash market, and if they're not able to do that, that's gonna be a little bit of a a little bit of a struggle.
• 6:12
  SPEAKER_02: And I think I think the Packers are trying to balance this right now.
• 6:16
  SPEAKER_02: They're trying to slow it down a little bit, not buy as many in the cash market and try and get product to rally.
• 6:22
  SPEAKER_02: But if they don't, I would be a little wary of that.
• 6:24
  SPEAKER_02: Um just it feels like it feels like we had a little bit of a I don't want to say artificial, but maybe a little bit of an artificial rally here with you know the war kind of getting over, crude oil dropping, feeling like we're gonna have a little bit of relief on the consumer side, but none of it's none of it's come to come to be yet on the on the demand side for beef.
• 6:49
  SPEAKER_01: What can you tell me about the cost of feeders here relative to what the live cattle board is?
• 6:57
  SPEAKER_02: Yeah, so the the the two boards like the feeder cattle board, I wouldn't say is so out of line right now, but the cash feeders um today, it it's maybe the feeders are maybe a little high on the board, even.
• 7:10
  SPEAKER_02: But the cash feeders today, we had the Corn Belt Classic, which is Superior's one of Superior's big summer sales.
• 7:17
  SPEAKER_02: Some of them are fall delivery calves, but there's a lot of them on there that are$300 losers.
• 7:22
  SPEAKER_02: So that's gonna be tough to manage.
• 7:25
  SPEAKER_02: Um they're they're too high.
• 7:27
  SPEAKER_01: So so the cash market is still very expensive relative to the opportunity on the board.
• 7:32
  SPEAKER_02: Definitely.
• 7:33
  SPEAKER_01: All right.
• 7:34
  SPEAKER_01: Any other final thoughts for our listeners this week?
• 7:37
  SPEAKER_02: I don't think so.
• 7:38
  SPEAKER_02: Just making sure that we're staying hedged and adding coverage at at these levels is kind of our thought.
• 7:44
  SPEAKER_01: But we've really recovered a lot in this cattle market as of late, especially kind of post-screw worm news here.
• 7:51
  SPEAKER_01: Uh, the market's really been able to nudge that off quite well.
• 7:54
  SPEAKER_01: Uh, still a tight supply situation, but maybe we've got some concerns on the consumer side, so nothing real new there.
• 8:02
  SPEAKER_01: All right.
• 8:02
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• 8:08
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• 8:15
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• 8:17
  SPEAKER_01: Uh, thank you for all the support on the cattle podcast here as of late, especially.
• 8:22
  SPEAKER_01: So thank you, Jace, for joining us and we'll catch you next week.
• 8:25
  SPEAKER_01: Thank you.