“Shootin’ The Bull”

by Christopher B Swift

6/24/2026

Live Cattle:​

Be prepared.  For what?  I don't know, just be prepared. There are multiple indifferences within the industry.  From the congestion at the center of the plate, working its way up, to near or new contract widths between starting feeder and finished fat. Then, throw in what appears to be internal squabbling between associations, local, state, and federal agencies about the screw fly, and there is no telling what the price for fat cattle may do. To complicate further, the obvious desire to not replace inventory at the elevated feeder cattle price, and packers restricting slaughter to achieve the higher box price, is a balancing act like no other. All of the above suggests more risk of greater price expanse, volatility, and as likely to be in one direction as the other. So, be prepared.  How? Own the at the money put options in the contract month you will market inventory.  Whatever happens, your final sale will be whatever it is in the cash market, plus or minus the cost of the option premium, or profit from. However wrong I may be in this assessment, I believe fewer producers are hedged, have forward marketing agreements, or have done so in a manner that won't be of much benefit were there to be a material break in price.  Hindsight mirrors both sides.  

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​​​​Feeder Cattle: ​

I think it is as simple as this; cattle feeders are over a barrel in having to bid higher for inventory.  Hence, buy the at the money, or to $10.00 out of the money feeder cattle calls in the contract month you will be procuring inventory to place.  Your grievance will turn towards not fully participating in a price retracement of significance.  Backgrounders, looking to market into the video sales, have the more defined ability to help manage the potential for adverse price fluctuation, simply due to the short period of time needed to protect a price.  For producers marketing into the video sales, buy the at the money put on the August contract and liquidate it the second the gavel slams on your load.  Your grievance will be having lost some portion of the option premium if prices don't decline.  Of all the grievances you may incur, the biggest one may be from doing nothing. Hindsight mirrors both sides.  

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​​​​Corn:

KC wheat was the only grain or oilseed in the green at the close today.  All had been higher, but faded into the close.  Polar opposites of agriculture are taking place as cattle producers are enjoying higher prices for cattle and lower prices for feed.  Farmers are suffering from weather in some regions, perfect in others, high input costs, large acres planted, and little foreseen in forward demand. As well, the loss of the energy component could be a consistent detractor towards greater demand. With all that said, wheat is the market that has started to realign domestic price with world price, and a very short crop year. This market has appeal when the selling slows. Beans will be next in line, but for pork, poultry, and aquaculture producers, soybean meal appears the market of most interest. A couple of months closed under $300.00 today and carry out a year from now is $12.00 or a good two day move higher.  While the El Nino weather patterns are not expected to impact US row crops this year, it may has potential to impact South American production.  There remains no shortage of fundamentals to impact trading and price fluctuation.    

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Energy:​

Energy was sharply lower again today. The question now will be whether it goes to zero or negative again.  As well, does it take the economy with it?  As sharply lower as oil is, the products are not.  This deals with refining capacity, so it won't surprise me to see the products remain elevated, even with further lower trading of oil.  Rebuilding the supplies of product, drained from the military actions, will take some time as well.  

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However far fetched as this may sound, but know that it is possible, if not probable, that the rally to the mid-May high is a wave 1, with current price action the wave 2.  The President has one more full year, and one of a lame duck, to go before exiting office. There is no way to tell how much more government spending will take place, or if renewed military actions with Iran, or elsewhere, will materialize.  There is about $2.00 more to go to fill the gap on the weekly continuation chart, even if not filling on a specific contract month.  If prices continue to melt, and trade under $54.00, it could be Katie bar the door.      

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Bonds:

​Bonds are sharply higher on the day.  Potentially a flight to quality after several overseas equities markets, and the US have seen some adverse trading to the up trend.  Bonds are anticipated to creep higher.  I anticipate the S&P mini futures to be building a H&S pattern with a trade under $7,292.00 helping to confirm and above $7,600.00 starting to negate the pattern.  Of one thing for sure, there is not expected to be any let up in price expanse or volatility of markets under the current administration. 

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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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