“Shootin’ The Bull”

by Christopher B Swift

6/10/2026

Live Cattle:​

Price range this week continues to be confined within the end of last week's trading range.  The fly issue is creating a great deal of sensationalism, but not much change in the number of cattle or amount of beef produced.  Traders continue to exit positions, with open interest nearing 300K.  I think this is because few know what the next most probable move will be.  The firm cash keeps basis positive, increasing the risk to cattle feeders having, or needing, to market into the future. 

 

Cow slaughter was highlighted in a commentary I read.  Is the lower cow slaughter due to the cows actually not being here, or are they standing in for the heifer to get one more calf out of her, like producers did in 2013 & 2014?  Answers are appreciated.

 

Packers have little incentive to increase slaughter. Father's Day is next weekend. Anything on the store shelf for was slaughtered a week or two ago and most likely in transport.  The 4th of July will be a big holiday this year in the celebration of 250 years of Freedom!  Weather permitting, there is expected to be significant celebrations. Mostly, hamburgers and hotdogs will be on the menu. As stated above, the fly is not increasing or decreasing cattle or beef production.  It is though, further dividing the industry as producers in the south have been stripped of supplies from Mexico, and now, the potential for widespread quarantine is a huge disproportion of production capabilities. Again, I am more concerned over what is not known than what is known, leading to; if you didn't like the price of cattle last Thursday morning, do something about it while the opportunity to market well above that low currently exists.      

  

​​​​Feeder Cattle: ​

Beneficial rains are helping to heal some pasture conditions.  This in turn is believed encouraging producers to put something on the pastures.  The slight downturn in the lighter weight markets last week, appears to have regained strength this week.  Cattle feeders continue to be apprehensive about bidding too much higher, due to projected breakevens so negative. With packers refraining from increasing slaughter, and cattle feeders holding back inventory, the manipulation is keeping beef production about status quo. Without a string of events, that starts by breaking up the congestion at the center of the plate, leading to grocers and restaurants bidding higher for boxes, prompting packers to slaughter more, encouraging cattle feeders to go bid for inventory to meet the renewed demand, producers may be spreading themselves even thinner. If you are going to spread yourself even thinner, and did not like the price area of last Thursday, do something about it. Basis hasn't improved by that much, but the price of futures have moved much closer to last Friday's high than low.  This should spur producers that will be marketing in the upcoming video sales to act while prices are sharply higher than last weeks low, but still a basis spread to contend with.  Since the gavel will slam on the majority of cattle, prior to expiration, put options may still have premium, depending on number of days left.  If all you need is something to get you by on, do not use any strikes out of the money as you will need all of the 50% Delta of an at the money option to help in 100% of any decline that may transpire.  Were prices to stay stable, or rise, there may be a percentage of the premium left.  If you choose to protect the underbelly of this bull market during the video sales, the second the gavel slams on your cattle, offset the option and add or subtract the difference from your final sale. Although one of the most unflattering sales pitch there is, it is very applicable at this time. "Wouldn't you just hate it if all that hard work you did the past 12 months was for nothing?"  Do you have that much profit margin to disregard a lower price?  You may take this with a grain of salt, but yes, I am attempting to hit your hot button to act.  If prices continue higher, at some of the rates of gain seen in the past, the loss of a percentage of options value may or may not be inconsequential to your production. If goes sharply lower in price, that would be consequential.     

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​​​​Corn:

For the most part, grains and oilseeds traded a little higher.  Today's analyst's were not bullish corn or beans at all with most suggesting not much change in Thursday's WASDE report. I don't disagree at the moment, but do believe the lower trading is of great benefit to producers in the future. Wheat continues to hold my undivided attention.  World wheat appears the issue of US wheat not being able to sustain the higher prices. I think all three have the potential to have made a bottom, but if a new low is made, especially in wheat, I will begin making recommendations for the May of '27 contract month.   

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Energy:​

Energy was sharply higher.  I anticipate energy to continue higher with the bull trend already resumed.  Diesel fuel is expected to lead the way.  Any escalation of military actions will increase the demand for diesel.  As supplies of all are down drastically, it wouldn't take much to send them sharply higher.  I recommend keeping farm tanks topped off to average price if continues higher and put pencil to paper to see what the difference to your bottom line would be by booking fall harvest at current levels, in comparison to $1.00 to $2.00 higher or $1.00 lower.  

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Bonds:

Bonds were soft again today. They were higher for most of the morning.  I expect some Presidential tweets to surface in the attempt to keep equities from falling further.  Similar to the Dot com bubble, the AI and data center bubble appears stretched pretty thin.  I was a broker at J.C. Bradford at the peak of the Dot com bubble.  IPOs were as hot as pancakes off the griddle back then and investors could not get enough, until they were full. Stock brokers could not be told the top was coming, as the new internet was the new west.  We all know how that turned out.  The west got settled and all of the companies had their web address for life. From the top of the Dot com bubble to the next high, it was 13 years in the S&P and 16 years and 6 months before the Nasdaq did.  ​

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Were the rates on deposits to reach a little higher, the baby boomers, all other generations are complaining about, could reduce equity holdings for fixed rate deposits and may or may not produce a higher rate of return than were equities to top and start the next multi year bear market.  With Rome burning, and our US house of representatives more concerned over the price of NFL football than the economy, it may  not be far from now.  The House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust spent approximately 2.5 hours discussing the NFL during a hearing on Capitol Hill. The committee probed whether professional sports leagues should retain their antitrust exemptions as more games move to paid streaming platforms. 

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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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