Latest / Professional Ag Marketing Podcast / The Opening Look | October 27th 2026

Transcript

The Opening Look | October 27th 2026 · Professional Ag Marketing Podcast

• 0:05
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:10
  SPEAKER_00: Good morning, everybody, and welcome to the opening look.
• 0:13
  SPEAKER_00: This is our new segment.
• 0:14
  SPEAKER_00: We're posting every morning.
• 0:16
  SPEAKER_00: So if you want a quick recap, about five to seven minutes every morning of what hogs are doing, grains and cattle, uh, come find us and we'll be running through that for you.
• 0:26
  SPEAKER_00: Today we've got a fast moving market session.
• 0:30
  SPEAKER_00: Soybeans recovering uh from a sharp post-election knee jerk reaction.
• 0:34
  SPEAKER_00: Corn's kind of charting its own path as it decouples from recent energy market swings, livestock reacting to a cattle on feed report, uh, and hogs wrestling with a seasonal supply pressure and soft pork cutouts.
• 0:47
  SPEAKER_00: Uh, let's break that down, starting with Mike here today.
• 0:50
  SPEAKER_01: Good morning, Nathan.
• 0:52
  SPEAKER_01: So where I wanted to start with the grain market here this morning was yesterday we had pretty erratic trade right out of the gate.
• 0:59
  SPEAKER_01: We had a presidential election in Brazil over the weekend.
• 1:02
  SPEAKER_01: That was a shocker.
• 1:03
  SPEAKER_01: Uh, president uh the incumbent Lula won the election, and he really wasn't supposed to.
• 1:10
  SPEAKER_01: So, with that being the case, their real dropped very hard yesterday.
• 1:14
  SPEAKER_01: In fact, it was almost the second largest uh down day they've ever had or move really in uh the Brazilian real.
• 1:22
  SPEAKER_01: So, with their currency going down, uh that makes our exports on soybeans cheaper.
• 1:27
  SPEAKER_01: So that make uh made our exports less competitive in the global market.
• 1:32
  SPEAKER_01: And soybeans reacted to that.
• 1:34
  SPEAKER_01: We traded lower most of the session yesterday.
• 1:37
  SPEAKER_01: We tried to bounce back a little bit towards the end of the session, but a pretty rough close still.
• 1:42
  SPEAKER_01: And then on the overnight here, Nathan, now we're up eight or nine cents going into our morning break here.
• 1:47
  SPEAKER_01: So the soybean action was controlling most of the grain markets yesterday based on that election news.
• 1:53
  SPEAKER_01: We also had a few other things like crop progress, maybe to talk about harvest pressure, but those were the majority of what we've seen.
• 2:01
  SPEAKER_00: Absolutely, Mike.
• 2:02
  SPEAKER_00: And talking about that crop progress, I've got some numbers in front of me here.
• 2:06
  SPEAKER_00: Looks like on corn, as of yesterday's report, uh released October 25th, uh, we were 60% harvested on corn versus 66 on average.
• 2:15
  SPEAKER_00: So a little bit behind on pace there on corn harvest.
• 2:18
  SPEAKER_00: Uh looking at soybeans, weaver, we are actually ahead of average seasonal pace.
• 2:22
  SPEAKER_00: Uh, yesterday's report said 79 complete, so almost wrapped up there.
• 2:27
  SPEAKER_00: 77 being a seasonal average.
• 2:30
  SPEAKER_01: Iowa tried to catch up last week, but still struggling quite a bit in those numbers, it looks like.
• 2:34
  SPEAKER_01: Them probably the reason why we're uh behind that five-year average in both.
• 2:38
  SPEAKER_01: Uh what do you think on uh a few other things on the grains to wrap up before we work on to the cattle market?
• 2:44
  SPEAKER_00: I'd say the last thing is this conversation we've been having uh recently about this decoupling with the energy markets.
• 2:51
  SPEAKER_00: Uh crude oil has been reaching into contract highs here.
• 2:54
  SPEAKER_00: Uh WTI and Brent crude oil uh above 100.
• 2:58
  SPEAKER_00: Uh, and corn has been reacting opposite to that uh over the since the October Waz day, really, when it sent it downward.
• 3:06
  SPEAKER_00: So we're really seeing crude and corn decoupled, whereas typically they correlate and move in the same direction.
• 3:11
  SPEAKER_01: More fundamental trading now, less inflation trading in these grain markets.
• 3:16
  SPEAKER_01: We'll see if at some point we've got midterms few things coming up.
• 3:19
  SPEAKER_01: Uh we'll see if that uh has a play in the grain market yet again here, Nathan.
• 3:24
  SPEAKER_00: That's exactly right, Mike.
• 3:26
  SPEAKER_00: Well, should we wrap the grains up and move into some livestock here, starting with cattle?
• 3:30
  SPEAKER_01: Yeah, definitely.
• 3:31
  SPEAKER_01: We had an interesting uh cattle on feed report on Friday there, where we saw the the big number, well, on feed was at 99.6.
• 3:39
  SPEAKER_01: No real story there, but the placed number, 87.9%.
• 3:44
  SPEAKER_01: Uh so 12% lower than last year.
• 3:47
  SPEAKER_01: Marketed uh in uh September there, 93.4 as well.
• 3:51
  SPEAKER_01: So we saw for the second straight month in a row sharply smaller placements that surprised that uh market place there.
• 3:58
  SPEAKER_01: Yeah, it's just showing short supplies of cattle here, well into next year, it looks like.
• 4:03
  SPEAKER_01: And uh those last two months placements numbers are the lowest of the century.
• 4:08
  SPEAKER_01: And I sure basically uh smaller cattle supplies going into 2027 there, Nathan.
• 4:13
  SPEAKER_01: So that cattle on feed gave an initial hot start to the market yesterday.
• 4:17
  SPEAKER_01: We took off, had a really nice open, then it kind of faded that noise uh probably uh mid-morning there, it seemed like, and we traded back to pretty much even on the day.
• 4:27
  SPEAKER_01: But for the move, we did set new highs on the move in those fat cattle contracts, for example, and uh yeah, a really nice trading session uh showing the really nice uptrend we've had in this cattle market.
• 4:40
  SPEAKER_01: It seems like we just taking this nice consistent staircase higher here in the short term, and we haven't been violating any uh any support lines or moving averages.
• 4:51
  SPEAKER_01: Yeah, it's been a really pretty chart to look at lately.
• 4:54
  SPEAKER_00: Do you think that can last, Mike?
• 4:56
  SPEAKER_00: Are we gonna keep climbing this staircase or are we gonna take the elevator down at some point?
• 5:01
  SPEAKER_01: I would assume we'll try to have some pullbacks.
• 5:03
  SPEAKER_01: We uh, you know, one of the targeted levels was 230 on that December fat cattle for a lot of folks, and that gap got filled now.
• 5:11
  SPEAKER_01: So it's at a nice retracement level too, over 60%, right around that same area.
• 5:17
  SPEAKER_01: So we're getting to the point now where uh you are due for a setback in this cattle market, but last week with that cattle on feed number, you know, we had pretty decent cash again, around uh, you know, 228 in the north, 230 in the south.
• 5:30
  SPEAKER_01: Not much of it traded because of that news.
• 5:32
  SPEAKER_01: People wanted to wait until this week, which we're gonna have a larger show list this week.
• 5:37
  SPEAKER_01: But it looks like cash has made some pretty good advances here.
• 5:40
  SPEAKER_01: We've got good underlying fundamentals, we don't have a lot of supply, and uh cash is holding in well.
• 5:46
  SPEAKER_01: Um, packers have been pretty efficient with their with their line speeds and production there, but uh the the the consumer continues to show some resilience here in the short term, and box beef has held in pretty well, Nathan.
• 6:00
  SPEAKER_00: Consumers like beef, Mike, and I don't think that's gonna change anytime soon.
• 6:04
  SPEAKER_00: If you've got the money to pay for it, they're probably going to.
• 6:07
  SPEAKER_01: It sure looks like it.
• 6:08
  SPEAKER_01: Uh not so much on the hog side, though, is it, Nathan?
• 6:11
  SPEAKER_01: You're still struggling over there.
• 6:12
  SPEAKER_00: No, Mike.
• 6:13
  SPEAKER_00: Uh the saying is hogs get slaughtered, and that's currently what's happening to this market of ours.
• 6:18
  SPEAKER_00: Um uh we've been kind of calling it death by a thousand paper cuts, but really all of that bleeds into supply and demand.
• 6:26
  SPEAKER_00: Uh, starting with the supply piece of it, uh, we have moved seasonally higher on supply as we moved from the late summer into early fall.
• 6:34
  SPEAKER_00: Uh, very typical.
• 6:35
  SPEAKER_00: You increased harvest numbers, you increased weights.
• 6:38
  SPEAKER_00: Uh, every year it happens.
• 6:40
  SPEAKER_00: However, this year it's been a larger than average seasonal increase.
• 6:44
  SPEAKER_00: We went from in the summer about 2% less on harvest.
• 6:49
  SPEAKER_00: Uh compared to now, we're very even compared to year-go levels on harvest, slightly higher, even looks like over the next couple weeks.
• 6:57
  SPEAKER_00: Uh, weights, on the other hand, we were running three pounds heavier roughly to start the year, uh, moving into July roughly, uh, same about three pounds heavier.
• 7:07
  SPEAKER_00: Uh, now we're sticking pretty even with that uh last year kind of level on weights, uh, but still seasonally increasing.
• 7:14
  SPEAKER_00: Uh summary of that, we're putting more pork on the market, uh, and demand just isn't strong enough right now to eat through that.
• 7:22
  SPEAKER_00: Uh demand has been very weak, partially due to the Brazilian election and competing uh Brazilian pork being cheap on the global market.
• 7:31
  SPEAKER_00: You have high global supplies of pork, uh, you have inflation weighing on consumers around the entire globe.
• 7:38
  SPEAKER_00: Um, we're thinking it's not so much of a preference conversation.
• 7:42
  SPEAKER_00: Uh, people aren't moving away from pork because they don't have enough money to buy it.
• 7:47
  SPEAKER_00: Uh, they're just purchasing less of everything because uh this consumer's becoming flat out broke in these in these environments, Mike.
• 7:55
  SPEAKER_01: Well, a rough one on the hog markets here.
• 7:57
  SPEAKER_01: So to wrap up, I'm just gonna talk about a few things uh to recap the day here.
• 8:01
  SPEAKER_01: We've got the soybean market rebounding from yesterday's election shock as harvest progresses and wraps up here.
• 8:08
  SPEAKER_01: Uh the corn market, we've had a decoupling from the crude oil market lately and some weakness there after a poor uh couple reports.
• 8:15
  SPEAKER_01: And uh we're about a week or 10 days away from harvest wrapping up there.
• 8:19
  SPEAKER_01: Uh the cattle market cash has held pretty strong here.
• 8:23
  SPEAKER_01: We had a pretty bullish cattle on feed report at the end of last week there and uh a cattle chart that looks very supportive for the time being.
• 8:31
  SPEAKER_01: And on the hog market, we're just uh soft cutout, soft demand, uh working at a time of the year where supplies are starting to go up seasonally here.
• 8:40
  SPEAKER_01: So uh approaching a rough time of the year.
• 8:42
  SPEAKER_01: So thank you everyone for logging on today.
• 8:45
  SPEAKER_01: We really appreciate it.
• 8:46
  SPEAKER_01: We'll see you tomorrow morning.
• 8:48
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• 8:54
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• 8:56
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