“Shootin’ The Bull”

by Christopher B Swift

​12/19/2025

Live Cattle:

In my opinion, cattlemen pulled out all the stops the past two weeks in the attempt to gain market share before years end.  With fewer animals available, and even fewer available to the open market, due to vertical integration having stepped up considerably in '25, the spreads being created between what cattle are bringing today and what beef may bring in the future are widening exponentially.  This has been a historical year in cattle.  Not only in price, but in abnormalities that just seemingly kept coming.  The new world screw worm, tariff's, shifts in consumer demand, Presidential influence, and exposure of too much processing capacity for the number of animals available, are just a few of the factors that drove cattle to historical price levels. Next year doesn't seem to hold too much promise for an increase of inventory without the reopening of the Mexican border.  The length of time being closed is believed to have increased production capabilities in Mexico and may or may not forever be changed from previously.  If so, contraction in production would be anticipated sooner than later in southern feeding areas.  The President likes tariffs and with another 3 years to go, there is not much telling what else may transpire that has nothing to do with cattle production.  In preparation for 2026, I anticipate that fewer producers will use risk management after hindsight of this year was so clear.  This would lead to more risk being assumed, and with margins already negative, and reliance solely upon an ever-increasing price; the volatility and price expanse could exceed this year's. 

 

Energies are believed in a bear market with the President continually expressing his desires for lower commodity prices.  Soybeans have plummeted and exposed how reliant the US is on exports.  Of agriculture production, cattle are seemingly the only shining star there is, but unfortunately, the risk to participate is enormous.  Interest rate derivatives have been sluggish and expected to remain that way as commodities appear in a deep recession and core inflation now a lower rate of gain. I have little reservation that 2026 could be or is going to be as exciting as this year and produce opportunities for agricultural producers to procure and market inventory in a wide and potentially volatile price range.  I recommend producers take some time to educate themselves on the use of derivatives.  How they work, why they work, and how to use them in your operation.  While some will say that futures and options are "too risky", at the very least you start every trade at even, unlike cattle production that starts in the red.  Education will lead to understanding and understanding into how to best use all the tools available that can help mitigate the risk, inherent in commodity production. I am excited about 2026 and we at Swift Trading look forward to servicing clients' needs while navigating the future.  

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Feeder Cattle:

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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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