Latest / CattleUSA Daily / 203: Cattle Market Meltdown? What the Latest COF Report REALLY Means with Dan and Samantha

Transcript

203: Cattle Market Meltdown? What the Latest COF Report REALLY Means with Dan and Samantha · CattleUSA Daily

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  In today's market episode with Dan and Samantha, we are
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  breaking down the cattle markets.
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  What have we been seeing over the past few days?
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  The government has opened back up.
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  Some major media news hits have happened in the markets.
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  How has that affected everything and what are we seeing as far as
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  that is concerned in the commodities market?
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  How that's affecting the live cattle market, all of those
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  things. Dan and Samantha are breaking it
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  down. All for us today.
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  Before we hop into today's episode, if you are watching on
• 0:28
  YouTube, if you could take a second to make sure that that
• 0:30
  you are subscribed to our channel and that you like this
• 0:32
  episode. And if you're listening on any
• 0:34
  of our podcast platforms, make sure that you are following on
• 0:36
  that platform and go take a second to write and review this
• 0:39
  episode and this podcast as well.
• 0:41
  We really appreciate it here at the team.
• 0:43
  And without further ado, let's go ahead and hear from Dan and
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  Samantha. Welcome to the Cattle USA Daily
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  Podcast, your go to source for the latest livestock markets,
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  industry insights and the updates shaping agriculture
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  today. I'm your host, Lauren Moylan, a
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  passionate advocate for agriculture here to keep you
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  informed and connected. Now let's dive into today's
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  episode. Dan, Samantha, welcome back to
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  the podcast. We have quite a bit to talk
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  about today. Dan, if you didn't know, I'm
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  sure you didn't watch last week's episode, but Samantha and
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  I had a blast without you. I mean, not saying we don't love
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  having you here, but it was it was fun to be able to make fun
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  of you and you not there to say anything about it.
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  And you don't watch these podcast episodes either.
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  So I told Samantha I was like, this is just free reign for us
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  today. We Dan left us alone.
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  Let's go crazy. Yeah, it was a total shit
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  talking session. You know, usually those
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  celebrity roast under your roasting is sitting there.
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  So. Not saying I'm a slut, that's
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  just how they work though I. Mean if the people want it, we
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  we have to listen. And if the people comment on
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  this saying that they want a Dan roast, we got to we will
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  provide. We will provide.
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  They didn't say that they wanted me to come to Iowa and you teach
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  me to actually how to actually cook a steak.
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  So apparently people agree with my air frying of steaks.
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  So. Wow, you.
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  Air fry your steak. Yeah.
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  Thank you, Samantha. Never heard of that.
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  So I learned to do it in college because I didn't have an A grill
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  in college and I started air frying my steaks and they
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  actually turned out really good. Guys like hate on it all you
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  want, but they turn out really good.
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  They're crispy on both sides. Dance.
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  Shut up, I'm going to mute you and turn off your freaking
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  video. They turn out so good.
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  I opened a can of worms today. I recognize that.
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  But yes, Samantha, I do air fry my steaks.
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  My husband grills the steaks like we we do grill steaks as
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  well. But if I'm cooking the steaks,
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  they're getting thrown in the air fryer and they're delicious.
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  So nice. Tastes like.
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  Watch, Dan just hates Dan hates everything about it.
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  He hates the principal, he hates he hates all of it.
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  So yes, it's a it's a sore spot for him, but you know, I.
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  Like to. Make him uncomfortable.
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  Caveman grilled a steak the right way to start with.
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  Let's not try and reinvent the wheel.
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  You know, we'll just leave it at that.
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  We'll leave it at. That as long as you're eating,
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  I'm here for it. Hey, I don't disagree with that.
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  So, Dan, you're such a hater. We can hate on you.
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  You can't hate on us. That's how this works here,
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  don't you know? Jeez.
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  OK, Well, what's happening with the markets, guys?
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  What is going on in the world this week?
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  Who wants to start us off? I'll take the lead over the
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  course of the last few months or so here.
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  Kind of seems like for every one piece of bullish news, we get
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  twice as much bearish news to sort of counteract it.
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  I do give our presidential administration a little credit
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  just in recent news that he waited until after trading hours
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  to release them of 10% removal or reciprocal tariffs removal on
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  Brazilian beef. In the past, every time Trump's
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  come out with a comment to lower beef prices in some sense or
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  another, even just the talk of it, we've kind of seen it hit
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  our feeder cattle and live cattle markets much harder than
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  it impacts box beef cut out values and ranchers kind of end
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  up getting the short end of the stick of it.
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  Probably would have done the same thing this time with the
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  new tariff news had it been said during trading hours and there
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  not been a weekend in between to kind of think about it.
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  That timing probably saved us from another downward trend in
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  the market to start the week. I also heard word that this
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  tariff news was leaked, you know, earlier last week.
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  So maybe that's also what provoked that limit down move
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  last Thursday. Still not really sure what
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  fueled it, but hey, we'll take the upswing we got yesterday.
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  I think kind of what this administration still has to
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  understand, you know, don't underestimate that the markets
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  will do what they need to do when they need to based off
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  supply and demand. You've heard it preached
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  probably plenty of times before. Our US heard smallest it's been
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  since the 1950s. You know, these highs make
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  sense. I think if the government is
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  really to focus on anything in the industry right now, I'd
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  rather it be that one. You know, we don't open the
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  border prematurely. I think that threat of the screw
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  worm, we just can't handle it unless there really isn't 1 at
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  all. I think there's a lot of good
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  things kind of in the USDA's plan that they most recently
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  released and implementing that alongside the DOJ investigation
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  into the Packers. You know, I'm cool be
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  transparency in the beef industry.
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  All good things if the wheels are in motion.
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  Otherwise, I think we could just do without the extra noise and
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  leave the markets to work how they're supposed to.
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  I think with with that, we also take into account, you know,
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  Trump's fighting with Mexico right now about drug cartels.
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  It's all over the media. You were going to have $10
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  hamburger no matter what. Take that factor in heifer
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  retention. Catalan feed reports coming
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  later this week or reported to maybe be bullish.
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  So maybe that had to play in higher prices yesterday.
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  But looking into the cash market here, no negotiated fed cattle
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  trade reported yet. This week it ranged from 2:25 to
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  2:27. Last week saw some trade at 2:28
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  in the South. Late sales in the Northern
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  Plains touched lows. Two 18222 sale barns were mostly
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  lower late in the week. Your sale barns did gain a
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  little bit of ground. Feeder cattle were mostly
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  steady. I think really what took the
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  brunt of the lower prices from what I've seen is the calf
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  market. I think there is still that
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  concern from cash buyers surrounding whether or not
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  prices will be where the prices will be when it comes to time to
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  market these calves further in the next year.
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  So you know, like Dan said, traders like stable markets and
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  we're just really not seeing that type of consistency.
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  I think at this point, keeping risk protection in mind is huge.
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  For a while, we all wanted to ride out the highs until it
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  crashed and then when it did, we kind of had a hard time deciding
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  if it was going to keep going lower or if we were going to be
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  able to turn this thing back around.
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  Some of us are still kind of at that point.
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  I was relieved. Like I said, see the markets up
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  on Monday. I hope we continue to see that
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  in the next few years specifically, but even just
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  within this week to support herd expansion.
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  But I think there is that long term bearishness still at play.
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  There's a lot of unpredictability clearly in the
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  media and our presidential administration.
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  So just keep in mind these are still good prices to be
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  protecting at, especially looking further into next year.
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  Dan, what are your thoughts on things that have happened this
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  week? Percent spot on, Samantha.
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  Yeah, a lot of volatility as usual of both directions.
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  Now if you go back rewind to last week, you know that big
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  limit up movement last Monday that was lower open interest.
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  So definition of a dead cat bounce shorts taking profit.
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  Then the following 2-3 days you had lower open interest on move
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  lower once again that becomes lawns taking profit.
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  So not a healthy market. You want to see new loans come
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  to the market. So Fast forward to today and we
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  get yesterday's open interest report and that shows we had a
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  touch higher open interest. So we had new loans coming into
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  the market yesterday driving the market higher.
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  So that's supportive. I want to see that.
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  I want to see, you know, 2-3 to 5000 contracts a day.
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  We add in a higher market that's very, very constructive.
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  If we see that we start turning towards that second gap on cedar
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  cattle up at 339340I, I want to see us actually not just attempt
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  to fill it, but I'd like to see us get into it and and actually
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  fill that gap and move towards that third gap.
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  You know that the next gap up there at three 55356 is going to
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  be a struggle. So got to keep our eye on the
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  prize and look for that first big gap, no doubt right away.
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  But there there's a chance if you can bring the buyers back
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  into this market, get everybody calm down.
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  That being said, equity suck. It doesn't.
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  You don't have to be a a stockbroker or an expert trade
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  the S and PS or Dows to jump on social media and see
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  delinquencies repos. All this stuff, all this bearish
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  news as far as our economy is concerned.
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  And, you know, one side blaming it on the tariffs, the other
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  side blaming it on a past administration.
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  And frankly, it doesn't really matter to me.
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  It's, it's the problem, right? So I believe not this past
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  weekend, but the weekend before, Trump was talking about sending
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  out some stimulus money. If that happens, you know,
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  that's historically been bullish commodities.
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  So if he does go through with that, I think we could see a
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  bounce in the cattle market. It's a bounce, you know,
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  basically all across the board in commodities and probably see
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  equity stabilized for or at least a brief spell.
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  It concerns me that we're already considering that, you
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  know, we're printing more money. Printing money is what got us in
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  the problem we're currently in and all the sudden we're right
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  back to doing it again. Or does that do long term?
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  So like I said, I'm not going to pretend to be an expert, but you
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  get on social media, you watch the news, a lot of uncertainty
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  as far as people's finances going into the holidays.
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  Historically, November is not a great month for equity.
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  So hopefully you get that Santa Claus bounce and yeah, back to
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  beef though, you know, right now your rib, your your loin.
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  Those are what's actually holding up this cut out at these
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  370 numbers. You know, there for a while it
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  was the truck and but we don't have anything to talk about
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  about demand being super, super strong until we get all the way
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  to the next March. So don't want to beat that dead
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  horse, but once we get past the next three weeks and lose that
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  Christmas buying on that midsection, I'm not really
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  optimistic for January, February.
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  If the economy is struggling now, let's add some Christmas
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  credit cards on to it. And we really have something
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  negative to talk about. But we're choosing to be in a
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  good mood today and open interest was higher.
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  So let's go with that. I love the positivity.
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  We are choosing to be in a good mood today, damn it, because
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  there is something good to talk about.
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  What are our thoughts on the government opening back up?
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  And we're going to start getting our Catalan feed reports back.
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  We're going to start getting all of these reports again.
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  I'm from a national basis. What are your kind of your
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  guys's thoughts on that? And then the initial Catalan
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  feed report too. Well, if you look at the grain
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  report last Friday, I'd say we should should have left the
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  government close. I knew you were going to say
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  that. What always the taxpayer
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  dollars, they, they come out, they barely lowered the yield, I
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  think what, .6 or .8 of a bushel.
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  And then they come out afterwards after the market
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  flash crashes and say, oh, we may have not had all the data
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  input incorrectly. It's like, hey, but you're not
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  my doctor. So inevitably here we are.
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  We're waiting on data that might not be accurate.
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  We don't have a true sense of yeah, we have the estimates from
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  the last several months, but you know, all this data they're
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  going to start dumping on us is skewed because you don't have
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  the prior data. So there's no baseline to go off
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  of. At the end of the day, I've,
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  I've always been a guy let the market do the what the market is
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  designed and supposed to do and decide the price.
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  Now all of a sudden you got these reports back and we're
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  right back to the old great US of A.
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  But once again, we're choosing to be in a good mood, so.
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  Talk about Dan, John isn't going to be on the podcast this week.
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  So us bringing all of this positivity is going to be like
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  this is going to be such a like high week for everyone listening
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  to like these market things because I love John's episodes,
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  but he comes on and he's like everything is shit.
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  Like, let's talk about. It I didn't figure you wanted
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  both of us doing that, So that's why, I mean, I could come on and
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  tell you how I really feel, but grandma's not going to be best
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  watching this. Hey, I wouldn't put too much on
• 13:26
  it. John always says that his most
• 13:28
  loyal listeners are grandma's in nursing homes and retired
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  truckers, so they might love it. Who knows?
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  Who knows? No, he's he's good and he's spot
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  on. I like that guy, very good at
• 13:41
  proving point. Samantha, what are your thoughts
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  on the Catalan feed report? I think with that coming out on
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  Friday, you know, we obviously can't just get more cattle out
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  of thin air. So I don't think placements are
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  going to be any higher than we've seen them on the last
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  report. You know, we've got feed yards
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  down in Texas growing weeds. So I think the Catalan feed
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  reports going to be pretty bullish now.
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  Could that change as we move into the first of the year?
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  Sure, especially as we start looking at opening that southern
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  border. But like I said, the numbers are
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  still minor. So what we're looking at from
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  the South right now, I've heard 250,000 head.
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  Like I said last week, we killed that and in two days.
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  So I think it'll be pretty bullish for the most part.
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  Yeah, definitely. I am very curious to see how it
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  continues to impact the market. And Dan, I kind of have the same
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  sentiment as you of like we're not going to hear anything new.
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  And we saw the grain one last week and they're like, oops, we
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  released it and didn't have all the information and sorry that
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  we affected the markets and made all of you guys run around with
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  your tail between your legs. Like thanks.
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  Appreciate that, guys. Great, great swing back into
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  regular operations and opening back up.
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  We really appreciate that. But the markets, excuse me, the
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  markets have been extremely volatile and we have been seeing
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  a lot of that media push and that consumer push just
• 15:09
  impacting our markets. Right now, beef prices in the
• 15:12
  grocery store are high, but our consumers are mostly worried
• 15:15
  about that hamburger price. And I think that we have to be
• 15:18
  realistic of the fact that like we got to start figuring out a
• 15:21
  plan for that. We need heifer retention.
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  We need to start rebuilding the American herd, but that's not
• 15:26
  going to see impacts for two years.
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  And So what do we need to be doing in the meantime to help
• 15:31
  supplement that and also not let it affect the American market
• 15:37
  too much at the same time, because we don't want to become
• 15:40
  too dependent on foreign demand or all of those other things
• 15:42
  going into it as well. But it's just absolutely, well,
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  we've talked about it week after week about how much the media
• 15:48
  and how much just consumer chitchat is impacting our
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  markets right now, both on the board and just in the sale barns
• 15:57
  as well. And they keep doing it.
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  I mean, just when we kind of think that the media,
• 16:02
  specifically our presidential administration understands the
• 16:05
  play that he has and he has got figured out to say these things
• 16:08
  after trading hours. And I appreciate that.
• 16:10
  But it just has so much of A play and they keep, they keep
• 16:14
  doing it. So it's like again, one step
• 16:16
  forward, 2 step back sort of mentality.
• 16:19
  Absolutely, Absolutely. Any other thoughts on the
• 16:21
  markets or anything else we need to head on this week, guys?
• 16:24
  I will stay as we are approaching the end of the month
• 16:27
  here of this PRF pasture range and forge protection insurance,
• 16:32
  rain insurance, whatever you want to call it is coming up on
• 16:35
  the deadline, December 1. So if that's something you want
• 16:38
  to get your foot in on, definitely don't be waiting any
• 16:41
  longer. It's good stuff.
• 16:42
  Yeah, definitely don't wait until you need a type of
• 16:44
  situation. Dan, any other closing remarks
• 16:48
  or comments, anything else that we need to head on within the
• 16:49
  market this week? You need feed, Get a bot.
• 16:52
  Of course, In my opinion, compliance is listening.
• 16:56
  Yeah, that's my opinion. My opinion only.
• 16:58
  So it's repeatable. I don't know about you guys, but
• 17:03
  it feels like winter's going to come early and it's going to be
• 17:05
  hard. So I'll leave that up to
• 17:07
  Lauren's weather expert coming on.
• 17:09
  But HP bought, you might need it.
• 17:12
  Yeah, definitely. From some of the early reports
• 17:14
  that we've been seeing, we have been blessed in the Midwest
• 17:17
  recently with some abnormally warm weather and everyone is
• 17:21
  saying enjoy it while you can because it's going to be a long
• 17:25
  winter from what we are seeing and hopefully not too dry of a
• 17:29
  winter, but who knows, who knows.
• 17:31
  So yes, I agree with Dan on that.
• 17:33
  Thank you both for your thoughts, comments, and insight
• 17:37
  today. It is much appreciated.
• 17:39
  To all of our listeners out there, make sure you check out
• 17:42
  the show notes down below. If you are interested in talking
• 17:45
  about LRPS, talking about that pasture insurance, that rain
• 17:48
  insurance that Samantha was talking about, check out our
• 17:50
  show Let's down below. You can get in contact with our
• 17:52
  team to discuss your options and what kind of works for you and
• 17:55
  your operation. Everyone's operation, everyone's
• 17:58
  ranch is different. So it's always best to just get
• 18:00
  in contact with our team and they can kind of break down
• 18:02
  exactly what will work for you and your operation as we go into
• 18:06
  these winter months and these extremely volatile markets that
• 18:09
  we have been seeing. Dan and Samantha, thank you for
• 18:11
  your time and to all of you listeners.
• 18:12
  We will see you all next time on another episode of the Cattle
• 18:15
  USA Daily Podcast. Have a good one y'all.