“Shootin’ The Bull”

by Christopher B Swift

6/29/2026

Live Cattle:​

The positive basis continues to widen.  The carry charge is widely inverted.  Both reflect producers having to assume more of the risk of potential adverse price fluctuation.  This was noticed last week, with the start of this week reflecting some confirmation. The next 60 days will see a $16.45 basis spread converge between cash, currently at $260.00 and August futures closing at approximately $243.55.  

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Profit margins remained positive last week, even with a decline of approximately $123.59 week over week.  Projected negative margins widened to $386.77 from $264.58.  I anticipate profit margins to continue to erode as feeder prices rose sharply at the first of the year.  I anticipate projected margins to grow deeper in the red without a sharply higher futures price or sharply lower feeder cattle price. 

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​​​​Feeder Cattle: ​

Producers, of just about every weight class, are going to see a large swath of inventory change hands in the coming weeks. Marketing and procurement will be conducted at the tip top of the historical price range. Same week last year showed the CME FC index close at $311.97.  At last close shown of $380.89, that is a $68.92 increase or 22%.  The ability to protect those gains for less than 5% in the January contract, continues to appear beneficial. 

 

Basis is a problem in feeders as it is in fats.  The discount of just over $28.00 to January is a hard pill to swallow, until it was found in hindsight to have been the highest price available to you. Supplies of cattle are not expected to change by much at all, but factors with beef are changing, suggesting there is no shortage of risk to manage.  Capital outlay continues to increase with the higher priced stockers & feeder cattle.  Management of is crucial, and we have the ways and means to help you.   ​

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​​​​Corn:

​Corn and beans tumbled on improving weather, and Tuesday's expected acres report to show both with an adequate share.  Even wheat plummeted as well with new lows in Chicago and KC.  With the rally in energy, corn and beans followed.  With the decline of energy prices, corn has made a new contract low and turned beans into a fledgling bear market.  Unfortunately, this turned indicators down and suggests to anticipate follow through.   

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Energy:​

Crude and the products were higher today.  A few days back and forth would not be a surprise. The creation of a drawn out sideways move is believed the next most probable direction. ​

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Bonds:

​Bonds were lethargic in trading and merely held on to a tic higher trade for most of the session.  Bonds appear in a fledgling up trend and supported by the President's desire to continue to inflate.  Commodity inflation is plummeting with metals, energies and grains all taking huge price cuts.   This leaves cattle at the top of the price chain, all on their own, even as beef prices are well off last year's high.  ​

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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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