“Shootin’ The Bull”

by Christopher B Swift

​12/12/2025

Live Cattle:

In my opinion, cattlemen pulled out all the stops to inhale negative margins again.  Sharply higher cash feeder cattle trades have pulled futures higher, but basis remains positive in both fats and feeders, suggesting that things bought today are cheaper in the future.  Optimism soared as well.  With the rally cry continuing to be "there just aren't any more cattle out there", and not everyone as anxious for higher cattle or beef prices, the slope of hope is believed going to be slippery.  If that is the case of no more cattle, then like processing capacity, someone will have to go without cattle.  Futures traders have been to some benefit converging basis, but have kept futures just far enough away to not encourage marketing on the board.  Hindsight, current optimism, the higher price created by, and extensive negative margins being entered into, leads me anticipate less risk management being applied, exposing producers to even more risk than previous. The risk on the way up was not making as much as what hindsight showed you.  The risk on the way down, not being hedged, is you will lose money. 

 

I've spent this week watching what is believed a C wave of a major B wave unfold.  The anticipated C wave unfolded as anticipated in 5 lesser waves to create the C wave.  While difficult to see on the bar charts, it is clear on the close only chart.  Every recommendation, and reason for, has been addressed this week. About all there is to do now is wait and see if packers are as willing to pay a higher price for cattle, and grocers, restaurants, and the consumer are willing to pay a higher price or consume more beef.  

 

Grains are already sliding down a slope of hope.  The woefully too short bridge payment, and great expectations of trade deals falling flat, is believed causing farmer selling at the end of the year.  Especially in beans, where the expectations were the highest.  I anticipate more of this due to the energy markets now breaking lower and crude oil having broken out of a triangle to the downside.  This would be a negative connotation to the biofuels. Bonds gave up when the Fed lowered rates, and then announced a renewed quantitative easing program to the tune of 40 billion a month, now called "Reserve Management Purchase" to meet the narrative. Bonds resumed their down trend by weeks end with new lows from contract high.  The Fed's actions this week are inflationary, in a time frame where inflation is dividing the economy further.  I anticipate this action to exaggerate the situation. 

  

Feeder Cattle:

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​Corn:

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Energy:​

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Bonds:

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​​​​​​ “This is intended to be or is in the nature of a solicitation.”  Futures trading is not for everyone. The risk of loss in trading futures can be substantial; therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not indicative of future results, and there is no assurance that your trading experience will be similar to the past performance.

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