“Shootin’ The Bull”

by Christopher B Swift

4/27/2026

Live Cattle:

Futures traders continued to narrow basis spreads starting off the week.  Although not the best marketing price structure, it is improved greatly from last week, and second only to two weeks ago.  Contract high may or may not be a hurdle.  For the moment, there is no one that I have spoken with that does not anticipate a new high.  Hence, self fulfilling prophecies' would not be out of the ordinary.  A new contract high will void the Head & Shoulders pattern and force another review of the wave count.  Regardless of top or not, the extensive rationing, through a higher price, is not being met with what would normally be a contraction of production capacity. No one seemingly wants to give up, or has to give up at the moment.  We've seen signs and signals, but little actual reduction of production capacity.  So, whether prices move higher or lower, what appears to be taking place is, producers are assuming greater financial output, with less inventory to work with, creating a narrower margin of error and widening the projected negative profit margin into the future. Nothing has changed in that prices have to go up, and a lot, to return input costs. What has changed is the pricing structure you market into has improved greatly from last week. Outside of the feeder cattle input costs continue to rise as well. Corn continues to inch up and diesel fuel in leaps and bounds, suggesting how badly cattle feeders need the higher price. 

 

​Feeder Cattle:

Futures traders helped out backgrounders by narrowing the basis, but simply widened projected negative margins further to cattle feeders.  Cattle feeders had seen some reprieve last week in the spreads, but market share continues to be desired, and it will take an even more aggressive stance in bidding to keep someone else from having cattle.  Whether this creates a new historical high in cash or futures remains unknown at the moment, but like above, it does stretch everyone a little thinner.  That may be from a capacity to utilization imbalance, or simply having paid a price that is potentially unachievable to return input costs. The sluggish pace in contraction of production and higher price paid is believed creating significant risk to manage.  

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There are two charts of the August contract below.  One is the same from last week with the other, a revised count, were a new contract high to be made. 

 

​​Corn:

All ended higher with corn and wheat the big percentile winners.  Beans perked up considerably and closed less than $.03 from the mid-March closing high.  Chicago wheat lead the day with a new high close from contract low.  KC wheat staggered for a while Chicago, but straightened up towards the close.  I anticipate all three to continue higher.  

 

Energy:​

Energy was sharply higher on the day.  I anticipate energy to continue higher. Huge daily price swings continues to be present in the energy market with computers scanning every headline for key words to send buy or sell orders into the market. It is truly amazing watching how quickly a price can move when the computers become active.  Nonetheless, diesel fuel remains impacted by the current military operations in the middle-east, the planting of 180 million acres of corn and soybeans, and the normal transportation and distribution of goods in a changing season. Although we have ample oil and oil reserves, there is a finite amount of refining capabilities and little way to increase, anytime soon. This leads to shortages for the products and potential glut of oil.  I continue to anticipate significant volatility and price expanse. 

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Bonds:

Debt instruments were soft today, but not by much and nothing definitive.  The tug of war between noted core inflation, the rise in the rate of, and commodity inflation, and the President wanting to stimulate further is anticipated to keep rates about where they are for the time being. I anticipate bonds to trade lower, but they are not doing much of anything at the moment. 

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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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