Latest / Professional Ag Marketing Podcast / Back to 2020? The Sharp Slowdown in This Week’s Cattle Harvest | Cattle Talk January 29th, 2026

Transcript

Back to 2020? The Sharp Slowdown in This Week’s Cattle Harvest | Cattle Talk January 29th, 2026 · 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.
• 0:20
  SPEAKER_02: Today is January 29th.
• 0:22
  SPEAKER_02: I've got Jeff with us here today.
• 0:23
  SPEAKER_02: How's it going, Jeff?
• 0:25
  SPEAKER_01: Hey, Mike.
• 0:25
  SPEAKER_01: Very good.
• 0:26
  SPEAKER_01: Thank you for asking.
• 0:27
  SPEAKER_02: Awesome.
• 0:27
  SPEAKER_02: Well, we're going to talk about the cattle market today.
• 0:29
  SPEAKER_02: I know I I think uh I had uh had Jace on last week talk about the cattle.
• 0:34
  SPEAKER_02: Let's get Jeff in here and see what your take is this week.
• 0:37
  SPEAKER_02: We're gonna talk a little bit about uh harvest.
• 0:41
  SPEAKER_02: We're talking about uh demand here a little bit, and then we're gonna talk about some broad market uh craziness going on today.
• 0:48
  SPEAKER_01: So the storyline I don't think has changed a ton week over week, and actually the volatility of this cattle market has slowed down a bunch, right?
• 0:56
  SPEAKER_02: That's about the only thing that's down week over week, volatility-wise, Jeff.
• 0:59
  SPEAKER_01: Yeah, exactly.
• 1:00
  SPEAKER_01: But so I I did want to bring up this chart to get us started, Mike, and and you maybe know more about the technical side of the thing than I do, so I'd be welcome any of your thoughts as well.
• 1:11
  SPEAKER_01: But I think the this is the relative strength index, and that's the the lines that are floating around on the bottom of the chart here.
• 1:19
  SPEAKER_01: I actually think this is a pretty good indicator from a technical standpoint.
• 1:24
  SPEAKER_01: I think it's a little bit bigger than that.
• 1:25
  SPEAKER_01: It's a gauge as to you know, like how much money is interested in this market and how much good news is currently priced into the market, right?
• 1:34
  SPEAKER_01: So I've been watching this on the the front month cattle.
• 1:37
  SPEAKER_01: So like this is the April cattle chart that's up here.
• 1:41
  SPEAKER_01: Um, you know, I I think if you go back there to like last summer, it gets pretty noisy.
• 1:46
  SPEAKER_01: Like I wouldn't uh focus back there because you know there was the front months is the ones that we were looking at at that time, but jump forward here a little bit.
• 1:54
  SPEAKER_01: Um, even that spot in September there, you know, as as the market kind of pushed up into an overbought situation, um, you know, that's been a pretty good indicator of a break.
• 2:06
  SPEAKER_01: So it happened back in September.
• 2:08
  SPEAKER_01: Um, it happened back in October where you've seen that really big sell-off.
• 2:12
  SPEAKER_01: You got just slightly overbought and the thing kind of crashed and burned, right?
• 2:16
  SPEAKER_01: And then flip around to the bottom side as you look at some of those oversold um moments, I think also being a pretty good indicator of some sort of a rally.
• 2:26
  SPEAKER_01: There, uh end of October, mid-November, late November was a big one.
• 2:32
  SPEAKER_01: Um, so the only the reason I bring that up is because the market has been quite sideways to maybe a little bit of positive momentum, right?
• 2:43
  SPEAKER_01: And I would just point out to you, we haven't really gotten to that overbought situation um on this chart.
• 2:51
  SPEAKER_01: And I I think that's probably the news today.
• 2:54
  SPEAKER_01: I think that's probably the place we're at in this cattle market.
• 2:58
  SPEAKER_01: There really isn't anything hugely getting in our way from a chart formation or technical standpoint, Mike, that I've seen.
• 3:07
  SPEAKER_01: If you've seen some stuff, please bring them out.
• 3:09
  SPEAKER_01: But I think that's we're just kind of augering higher to sideways.
• 3:14
  SPEAKER_01: I think that's really appropriate from a technical standpoint.
• 3:16
  SPEAKER_01: I think that's appropriate from a seasonality from a and a fundamental standpoint.
• 3:21
  SPEAKER_02: Seems like we are where we were back like last early summer.
• 3:26
  SPEAKER_02: It's just you barely click around a new high, but you don't blow it out of the water, but it's a nice steady uh incline.
• 3:33
  SPEAKER_02: Um I I was looking into this a little bit because the markets are still crazy today, but C vol on cattle, so volatility index is at 15.7%.
• 3:44
  SPEAKER_02: Gold, for example, just to compare it, because gold is absolutely nuts today, that's about 26%.
• 3:51
  SPEAKER_02: Yep.
• 3:51
  SPEAKER_02: So that it just to make that number sound a little bit more interesting for everyone in the room, corn is super, super boring of a market, especially lately.
• 4:01
  SPEAKER_02: That volatility index is at 15 as well.
• 4:05
  SPEAKER_02: So cattle and corn basically have the same C vault today.
• 4:07
  SPEAKER_02: Yep.
• 4:08
  SPEAKER_02: Where like gold is, you know, in the twenties, way above it.
• 4:11
  SPEAKER_01: So months ago, cattle probably had a higher volatility rating than gold.
• 4:16
  SPEAKER_02: Yeah.
• 4:17
  SPEAKER_02: So I mean uh uh just to put things into perspective, that that cattle market's just clicking around here.
• 4:22
  SPEAKER_01: Interesting.
• 4:23
  SPEAKER_01: I think that's relatively healthy though.
• 4:25
  SPEAKER_01: Yeah.
• 4:26
  SPEAKER_01: Um, I think that's that's just fine, is like I said, from where we're sitting, the time of year, fundamentally.
• 4:31
  SPEAKER_01: Um, I think that's healthy.
• 4:32
  SPEAKER_01: If we were super overbought today, I'd be a lot more nervous about this market taking a significant correction.
• 4:37
  SPEAKER_02: For sure.
• 4:38
  SPEAKER_02: Uh what can you tell me about some of the supply characteristics on cattle right now?
• 4:42
  SPEAKER_02: Kill has been super low.
• 4:43
  SPEAKER_02: What can you tell me about harvest on cattle lately?
• 4:46
  SPEAKER_01: Yeah, and I know we hit that on this last week too, so I apologize for bringing it up again, but I had to because it's like the lowest kill in forever.
• 4:54
  SPEAKER_02: And forever you mean like since COVID, right?
• 4:56
  SPEAKER_01: Yeah, I suppose.
• 4:56
  SPEAKER_01: Yeah.
• 4:57
  SPEAKER_01: Which is basically ever.
• 4:58
  SPEAKER_01: So it's basically the lowest weekly kill outside of a holiday.
• 5:03
  SPEAKER_01: Yep.
• 5:04
  SPEAKER_01: Um, or major weather event that uh and I know we had a weather event down south last last um weekend, but that was truly in the weekend.
• 5:13
  SPEAKER_02: Not like we're killing any cattle on the weekend, anyways.
• 5:15
  SPEAKER_01: No, definitely not running hard on a Saturday.
• 5:17
  SPEAKER_01: Um so yeah, as far as a non-holiday, non-weather event, uh weekly kill, it's the lowest since uh forced the forced closures of 2020.
• 5:27
  SPEAKER_01: Crazy.
• 5:28
  SPEAKER_01: Which is unbelievable.
• 5:30
  SPEAKER_01: Um the next unbelievable piece to that is the cash market is probably gonna trade a buck higher again this week than last week.
• 5:40
  SPEAKER_01: I think it was two bucks, a buck to two bucks higher, um, depending on north versus south last week compared to the week before.
• 5:47
  SPEAKER_01: So we are right.
• 5:53
  SPEAKER_01: They're not they're not getting there yet.
• 5:54
  SPEAKER_01: Um I think they will.
• 5:56
  SPEAKER_01: I think that's the way the mo the futures are stumbling a little bit because it might be underperforming where we're where we're at, but the day's not done yet either.
• 6:04
  SPEAKER_01: Um but yeah, just the fact that you're staying higher on cash and and these low kills.
• 6:09
  SPEAKER_01: If you're not watching the the YouTube video and able to say that see that um cattle harvest chart, I certainly encourage you to look that up.
• 6:17
  SPEAKER_01: That's really impressive.
• 6:18
  SPEAKER_01: Um so flip it over.
• 6:21
  SPEAKER_01: Next thing that we want to talk about, of course, is how's the demand doing?
• 6:25
  SPEAKER_01: Um, you know, when we look at the choice meat and the choice select split here.
• 6:29
  SPEAKER_01: So here's the choice meat graph.
• 6:32
  SPEAKER_01: Um, you know, you would argue, okay, it's not doing too bad.
• 6:35
  SPEAKER_01: It's going up a little bit more than what you would seasonally expect.
• 6:38
  SPEAKER_01: That's fine, but not when you flip that over and look at the kill chart.
• 6:42
  SPEAKER_01: Um, everything that we are that we are lower on kills today is really on the and uh we don't quite have all this data yet, but I suspect it's very much on the uh fed cattle supply side, not so much on the cow and bull side.
• 6:57
  SPEAKER_01: So, and my point to that is the lower kills is all about reducing that um the the amount of choice pounds that are coming out of the back.
• 7:06
  SPEAKER_01: Um, that's what we're doing in a significant way.
• 7:09
  SPEAKER_01: So choice meat in my mind is not that impressive considering what's going on there.
• 7:15
  SPEAKER_01: It's also not very impressive when you look at this chart that's on the screen of the choice select spread.
• 7:21
  SPEAKER_01: Um I know we hit on that a few times, but I don't see anything changing in a significant fashion there week over week, Mike.
• 7:29
  SPEAKER_01: Um we're it's it's not just boasting huge demand like any other data set that we've seen in the past year.
• 7:36
  SPEAKER_01: A week or two is probably not a trend, so I'm not I'm not ready to step out.
• 7:41
  SPEAKER_01: It's the wrong time of year to see some awesome demand on choice meat, but there's a few chinks in the armor there.
• 7:47
  SPEAKER_01: Um fly in the ointment type stuff that we're gonna continue to keep our eyeball on.
• 7:52
  SPEAKER_02: Very interesting.
• 7:53
  SPEAKER_01: You mentioned earlier um outside markets are crazy, Mike, today.
• 7:58
  SPEAKER_01: Can we get a quick update on that?
• 8:00
  SPEAKER_02: Yeah, so I'm gonna pull up a chart here, have Kate do it.
• 8:04
  SPEAKER_02: This is a chart of percent changes for the US dollar, would be the green line.
• 8:11
  SPEAKER_02: The blue line is soybean market, the pink line under it is SP 500, and gold is that uh kind of gold line there.
• 8:20
  SPEAKER_02: This is a minute chart going back through this morning.
• 8:23
  SPEAKER_02: The blue line going vertically up and down is about 8.30 this morning.
• 8:27
  SPEAKER_02: The reason I put all of these up here is at the about the same exact moment they all traded erratically different than where they were before that moment this morning.
• 8:37
  SPEAKER_02: A few different things had happened that uh that kind of caught my eye here this morning.
• 8:41
  SPEAKER_02: The stock market dipped really hard after the open.
• 8:45
  SPEAKER_02: Uh you saw a sharp decline in technology stocks, but it was specifically uh Microsoft.
• 8:51
  SPEAKER_02: Uh we had a broad tech sell-off, so the Nasdaq really led it, but uh really it was Microsoft there.
• 8:57
  SPEAKER_02: So they saw their worst day uh down 11% in in early trading here through the day, and that was all related on they've spent a bunch of money on AI and they've seen slower cloud growth.
• 9:08
  SPEAKER_02: So that was a little bit of a surprise this morning.
• 9:11
  SPEAKER_02: Gold, you saw massive profit taking happen at that same moment here this morning, and then soybeans somehow, someway were connected to that in a risk sentiment, I think, as well.
• 9:21
  SPEAKER_02: And then you tied back in the US dollar.
• 9:24
  SPEAKER_02: That kind of flipped and actually traded higher this morning.
• 9:27
  SPEAKER_02: That was interesting to me because what we've been seeing was people were buying gold super hard.
• 9:32
  SPEAKER_02: They were selling the US dollar in a debasement trade, and about nine, eight thirty this morning, nine o'clock, you all of a sudden saw that flip a little bit.
• 9:40
  SPEAKER_02: It it became a sell America buy the dollar again.
• 9:43
  SPEAKER_02: Um as the day has gone on through this Thursday session, it's been interesting because we've seen uh that that difference or trading pattern stop, kind of just a quick correction, and now we've seen safe haven demand kind of emerge again as they start to buy gold a little bit, stock market kind of stopped going down, so some very interesting trading all at the same time that had happened this morning.
• 10:09
  SPEAKER_02: And I I think this is relevant just based on money flow into the commodity markets, and one of the things we've we've liked to count on normally was that when you have massive money flow, go into commodities because of inflation concerns, because we're printing a bunch of government money, uh, government spending's out of control.
• 10:26
  SPEAKER_02: If you're gonna get a bunch of money to go into commodities, they normally like to go into the thing with the tightest balance sheet.
• 10:32
  SPEAKER_02: Well, Jeff, I don't know how you get much tighter on the cattle supply balance sheet today.
• 10:36
  SPEAKER_02: So that's something I've been interested in for a while.
• 10:39
  SPEAKER_02: Um and then some of the time it you know, you buy a whole broad index, so it doesn't matter.
• 10:44
  SPEAKER_02: They'll throw money at the whole commodity sector.
• 10:46
  SPEAKER_02: So that sometimes that can really make commodities go up that probably shouldn't, you know.
• 10:51
  SPEAKER_02: So I I find that very interesting in in trading this morning and and potential money flow, and it's even changed dramatically from when Pat and I talked this morning.
• 11:00
  SPEAKER_02: Um so just managing your risk is is gonna be difficult because uh you know that cuts both ways here today, and you're kind of seeing that a little bit.
• 11:08
  SPEAKER_01: Well, and I think the the story, big storyline, is you know, there was a time when this cattle market would have reacted up probably almost as violently as some of the other outside markets that you were indicated.
• 11:19
  SPEAKER_01: And we're off today, but I do think that's more on fundamentals.
• 11:23
  SPEAKER_01: Um and we you know, so the cattle did a fairly good job of ignoring a lot of what you're talking about.
• 11:29
  SPEAKER_01: And that in my in my mind, that is news.
• 11:32
  SPEAKER_01: That is that's different than six weeks ago.
• 11:35
  SPEAKER_02: For sure.
• 11:35
  SPEAKER_02: What else do you got on the uh commodity market, specifically cattle here today?
• 11:40
  SPEAKER_01: I think that's about it, Mike.
• 11:41
  SPEAKER_01: Uh, I think there's some real key indicators that we're gonna continue to watch in the week to come, and that's gonna be around obviously what the pounds of meat out the back door is, what the demand looks like it's doing, and uh, you know, um, so it's a big divorce right now as far as the supply side of this equation and the demand side.
• 11:59
  SPEAKER_01: And we're just gonna continue to learn and try to make some observations that we can apply to the bigger picture longer term.
• 12:05
  SPEAKER_02: All right, Jan feeder kettle, last trading day today.
• 12:09
  SPEAKER_02: Uh keep an eye on that, Jeff, if uh if uh you have anything to manage there.
• 12:13
  SPEAKER_02: A little bit of discount going to the next month there in March.
• 12:16
  SPEAKER_02: So thank you for your time today and I appreciate it.
• 12:19
  SPEAKER_01: Thank you, Mike.