Markets Now Early - 9-11-26 Scott Varilek, Kooima Kooima Varilek

0:00Arquets now is brought to you by Brevant Seeds. There are wins and then there are wins that you get with Brevant Seeds. Big game changing wins that turn heads and make people take notice. Get started at Brevant.com slash change the game. Thanks for joining us for markets. Now I'm a show work with Scott for like a Quema Quema Varu Lake. We are lower in the ag space this morning and everything but the cattle market. Scott, thanks for being with me. Let's talk about cattle. We've been grinding higher for the week. It looks like we might have higher weekly closes. Are you feeling like this recovery is sustainable? Oh, it feels good. Thanks for having me, Michelle. It's a nice grind higher. We get to go to the beef bowl tomorrow. That's just you people are coming. We've rallied a little bit. So it feels good. We've had a little bit of consolidation after the long ride lower. So hey, those every day grinding out several days in a row of lower,

1:01we kind of started to hold and found a little bit of a base and now finding some confidence. And I wish I could say, hey, this is funds coming in the market wanting to be long, but we're not there yet. Because of where open interest is, is that work? It's exactly what I'm looking at. The last three days open interest just got smashed or 13,000 contracts out of the market. And I think this is just some of these funds or some of these shorts that I'm hanging on in the market and saying, hey, I can feel a little bit better about being open here. I can take some profit on some of these shorts and rightfully sell. We're not really in that time of year where you start slapping on a bunch of confidence for a fourth quarter rally, but it's been such a bloody trail and it is a futures market. So it could just be some of that. Some short profit taking here. We're willing to stay open because we're finally seeing some stability here. And yeah, like we had talked earlier, maybe not the big headlines this week

2:02getting thrown at us that we're getting sick of. Yeah, I think that's been one of the big keys is we haven't had all the bearish headlines and the news coming at the market from the administration. The other key has been cash trade. We came out of last week with some higher money to 222, to 223 in the south. Do you think we can get higher cash trade that feels like the market is trying to price that in? Market is trying to do that. Yes, I think the south is feeling okay. We've still got tight supply in general that is still there for the guys that are hanging their hat on that solely. We still have that on our side here that the numbers aren't there like they are historically. So I think the south carrying through, this is the time of year the north has more numbers. We've got that fall run here and we've got a lot of extra weight on them or cost of gains have been cheap. Maybe growing a little bit still benefits us

3:02to put the extra weight on. So we lose a little bit of leverage in the north. So we're below the south, not a surprise. We didn't have a lot of bids out there last week that the trade is slow. And then for me in the north, we've got with Jocelyn closed. That makes me nervous just because it's in my backyard here. We're looking in, we've got a lot of producers that need to negotiate some cattle. We're an independent cattle, cash negotiators up here. And we've got to find a home for some of these cattle. So we're hoping for a lot of packer interest. We just had a little 220 last week from some regionals and that was it. And now we go through this whole week and it's pretty quiet. The only thing I'm really hearing right now is just some 345 meat bids out there, which is okay. If we're yielding pretty good right now, the 64% and higher on some of these yields, cattle should be pretty clean. And when you have those calves, they yield pretty good.

4:05So that can get us around that 220 live, after we've frayed them, which frayed getting a little bit insane. But hoping we get some more traction, some of the bids last week were four, three weeks out. So I'm a little bit nervous about the Norfolk as compared to the South yet. What about cash feeders? They have been strong. That's been a positive hasn't it? Now that feels good, you know? And this whole long historic rally we've had, it's been feeders are the leaders. And now it's the true test. We've got the yearlings coming off the grass in the North. Their performances outstanding, liking how they're trained guys that normally want to buy yearlings are saying, man, I can't touch these things. So that feels good. That's some of the stuff that we remember. We've got some optimism out there. It looks like the corporates are running really hard after these yearlings. It's not necessarily the farmer feeders

5:06that are running out there. Then maybe partly because they're getting some higher grain prices than they've had. But now we're getting some calves that are starting to come to town. And maybe a little earlier than expected. Some guys that would normally sell an October are going to sell here first because up to them or into September. We've got a large area, hay prices are high. We didn't get enough rain to really keep that grass, that lush grass going. So some of those dry conditions starting to pull some of these calves early. And I think we'll get a pretty good test here. There's a lot of optimism there. And I think even in the south hearing that some of those calves are starting to move early as well. So you've got to like their performance from the feeder so far. And I think that there's enough people looking around trying to refill. I think it'll stay that way. So from a technical standpoint, as I mentioned, we could have higher weekly closes again in live and feeder cattle futures. Technically, where do we need to close here to bring enough confidence back into the market

6:06to get the funds back yet? Yes, we've had three nice big sharp legs lower if you're looking at a chart in that old Elliot wave formation that when markets correct from a certain level, they'll do it in three legs. And then they chop a little bit before they start a recovery. And we've had those big three legs. And that's just kind of part of the confidence here like, hey, we've been bearish for so long. I can't wait to try to get bullish from a shell. I want to try, but we're still hesitant yet. I'm still lack of trust in some of the market. But we're within, I would say, five to $10. If we break out some of those levels, maybe we'd find some long-term traction. I mean, I'm still a guy that says the highs are in, we're not going back there. So that's where it's hard for me to say, hey, at these levels, can we really find some funds that I want to jump in? But at least the picture looks a little better than what we've seen lately here. Well, as we mentioned, the news headlines have been quieters,

7:08especially after last week and the presidential executive orders. And all of that, as we ended the week, we do have the president, though. I think we did early this week saying, confirming where the imports are starting to come from. And that would be Brazil and Argentina. That certainly is no big surprise, is it? No, not as a surprise at all. And I mean, that's where we pointed when this was going to happen. It's going to be South America. But it's a lot of beef. It's too early to tell how much is coming in. I mean, in comparison to what they have sent us to what this small window is, I don't know if, you know, them alone, they're not going to have enough cattle to quick run in and slaughter and send us all that beef. So it's going to have to come from the world, which, you know, other areas as well, which are just starting to have that feeling like that. Maybe they're not going to be able to get this done, you know, as much as I thought. So it's still, we've had imports steadily increasing,

8:10yeah, and I guess more than steadily, you know. Yeah, we're at record levels. We're pulling in a lot of beef. And we don't have it. So it has to come from somewhere. So it is coming in as we try to rebuild the cow herd. So we'll see, we'll have more numbers coming here. I would say over the next couple of weeks to see how much is coming in. And I'll be in Washington, DC next week for three days. I'll knock on his door, see if he answers and tell him how it is for his cow, guys, right? Just quick, Fort Morgan, they're up and running, but only what a thousand had a day, they're going to take a little while to ramp up to full capacity. Yeah, I'm thinking it's expected that it's a slow start, you know, had to get some workers back there, lost some workers, some upper management, you know, and other packers was kind of bragging how, well, they hired a lot of their workers away. So, yeah, natural struggle, but going in the right direction anyway, Michelle. And the Douglas Arizona port is back open this week after only a hundred had last week and shoot problems, right? Yeah, a little bit of shoot problems,

9:10but I think they kind of got that navigated through. And I still think feeders want to come up here, you know, the price that they're getting formed out there and what we're willing to pay up here are quite different. So there's a lot of incentive for them to want to pull them ahead and they're going to be green light, pulling them ahead every single port we get open. They're going to be coming across. Hogs down this morning, that market, doesn't seem to be able to get any traction, even though we have these big discounts with the futures to the index. Yeah, just kind of sitting here, sloppy, I guess, you know, generally October can get a little stronger. I could see it maybe leaving some of the rest of the months, maybe see a little bull spread action, but that's about it. You know, it's been a by-low sell high kind of market. There's not a major trend there. And really nothing to shift it. You know, the news over there seems pretty quiet. So all focuses on cattle and grains, because they're so much going on and hogs are just the one,

10:12hey, we don't have much happening here. And I think producers have been able to fill some barns at much better price. So kind of getting that steady flow back together. And I think that's why we're just seeing a little bit of a sideways trade action here. Yeah, and cutouts can't get any traction either. We were down a buck 82 there yesterday exports. This morning only 27,400 metric tons. So no runaway there. Finally, the green setting back pretty hard today. Some profit taking. Is that what it is going into the report? I think that's what it is. You know, when you have funds for record-long corn and beans and coming up against a report that everybody's gearing towards, natural for them to take some profit. And they can take out some of those support lines. There might be a spot where you're looking at coming into report day that that's kind of my support. Doesn't surprise me that they take some of those lines out just to kind of keep us all nervous and on edge. Because I think we are all nervous and on edge. I mean, there's so much uncertainty with the yields. There hasn't been much harvest pressure here. We've been going up.

11:13So I feel like we're standing on pretty firm ground. And I love having the funds on my side. But this report is a little different. I mean, we're not just the normal survey reports. Like we used to. We're pulling in some FSA data. Well, we've got USDA's got some boots on the ground. So a lot of learning that we have to do here with what this report's going to look like. And we've got some pretty sharp pull-off on the yield numbers as far as estimates. So I'm just nervous that the USDA doesn't pull them down as much as I want. I think you're not the only one in that campus. God, right. Thanks so much that Scott for like with. Quema, Quema, Vara, like in markets now. You can just picture it. The anticipation before the big moment, the band playing, the adrenaline flowing, the confidence that you're about to hit the field and simply dominate. Now you know it feels like to plan a field of bravant seeds. Because when you choose bravant seeds, you're not looking for a simple win. You're looking to turn heads and make a name for yourself. This is your turf.

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