“Shootin’ The Bull”

by Christopher B Swift

6/11/2026

Live Cattle:​

In my opinion, more indecision surfaced in this week's trading as traders kept fats within the two-day range of 6/4 & 6/5.  Open interest was down as well for the week.  As I write this, no cash trade has taken place.  Basis remains a huge issue for producers.  This week saw a slightly higher index reading, and widening spreads between starting feeder and finished fats in the futures market. This week's spreading is expected to increase the negative starting margin.  Feed costs at the moment are plummeting.  I know this will help in feeding margins, but with prices paid for feeders, and potential of adverse price fluctuation of fats, it offers little leeway.  Cattle feeders hold all the cards when it comes to the feeder cattle index, as they are the only ones that have an interest in a feeder steer/heifer. Their reserve in bidding to new highs suggest difficultly in foreseeing higher prices for fats, that work their way down to the center of the plate.  Cattle supplies continue to be a bullish factor for the industry.  Congestion believed building at the center of the plate may be what is tempering cattle feeders from bidding to new highs. All in all, boxes are stagnating; futures are stagnating, although in a huge range, and consumer demand questionable about increasing. Cattle feeders have to have the price go up.  Stagnation would be as damning as a move lower in price.  Stagnation would have the potential to crush the basis, leaving producers with no higher cash, and whatever expense, or loss of derivative produced.  Hence a reason why basis is so important.  There are ways and means to reduce exposure of the basis spreads, but not eliminate.  One simply has to come to the conclusion they will market inventory within a predetermined price parameter, and have the ability to live with the hindsight of actions. 

 

Corn made new contract lows this week.  This was an absolute rout of bullish corn traders and farmers.  As devastating as this is to farmers, it is a huge benefit to livestock producers.  Both corn and soybean meal have declined substantially in the past 3 weeks with corn down 14% from contract high and meal down 12% in the same time frame.  Carry charges will detract from the current price when attempting to capture the lower price into the future.  However, as above, there are ways and means to fix the lower prices, deep into the future, with options spreads that may or may not be beneficial to basis spreads as well.  Due to the exceptional price decline, I recommend using this turn of events, in just 3 short weeks, to potentially lock in favorable price levels; you no longer wish to transact business, for months, if not a year or more down the road.  Today's issues will most likely be long forgotten this time next year, and replaced with all new factors to contend with.  Using some of the price gains today, to help with what new factors there are to contend with in the future, can be of benefit to livestock operations.  As above, you simply have to make some decisions that you want to be proactive in procurement of feedstuffs, and then be able to live with the hindsight. 

 

Energy plummeted by weeks end with the President expecting a peace deal with Iran.  There is no doubt in my mind that were the issue to be resolved; it could well be one of the greatest feats in history of toppling a regime. I'm just not so sure that Iran wants to give up that quickly, as historical perspectives from other invasions of like countries have not produced intended results.  So, energy was put in a tail spin from an announcement, but nothing on paper yet.  I remain enamored by the volatility and expanse of price fluctuation of energy.  I am skeptical about a resolve and will not be surprised of renewed military actions, or a resumption of the uptrend.  Bonds were mostly higher on the week with Friday a tad soft.  Trump tweets are becoming as much a fundamental factor as rain or drought. When released, the price expanse, of multiple markets, becomes almost insatiable as related to the believed intended results. Bonds benefited as much as other markets.  His statement of wanting inflation suggests to anticipate more of.  If so, grains and oilseeds are on sale for more than 12% off previous high. 

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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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