“Shootin’ The Bull”

by Christopher B Swift

2/19/2026

Live Cattle:

​A tremendous amount of volatility today. Futures appeared to begrudgingly move higher with cash remaining firm.  Top or not, projected losses, and current spreads of starting feeder and finished fat, suggesting no improvement of, leads me to continue with recommendations to buy the at the money put and sell the out of the money call at a price you can live with not making any more money.  This is a sales solicitation. 

 

Interest in the market improved on Wednesday with a good increase of open interest. I can clearly see the interest from both sides. New longs are positioned in a positive basis in expectation of futures converging to cash.  New shorts are positioned adversely, due to the positive basis, but with price elevated to near historical highs, and tremendous working capital at stake, it is as easy to see new shorts protecting what has been gained in a very short period of time, with little retracement in price. 

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Feeder Cattle:

Futures traders weren't as gamey towards the close in feeder cattle.  This is with the index at a new historical high. Open interest improved in feeder cattle as well on Wednesday.  Backgrounders are believed in a similar, if not worse shape that cattle feeders as the spreads between lighter cattle and feeders appear have widen as much, if not more than feeders to fats.  Producers are pouring working capital into the cattle markets under what appears as excessively negative starting margins.  Seemingly, the two factors that making things work at the moment appear to be holding on to them for as long as possible and grow them to weights well beyond what used to be considered normal, before moving to the next line of production.  This is a great deal of manipulation of time and weights in the attempt to hold back as much inventory from the market as possible.  Due to this manipulation, and significant shift in production modes, it suggests there would be a great need to protect oneself from adverse market conditions were anything to disrupt the status quo. 

 

​Corn:

Corn was lower and beans were higher on lower corn acres estimate and higher bean.  Bean oil is the reason for the rally in beans and any further mandates that support biodiesel will be of benefit to bean oil and beans.  For corn, without the E-15, the reduction of approximately 4 million acres doesn't seem to impress anyone. Wheat was higher and mostly likely due to some fire damage.  I anticipate bean oil to continue higher and recommend moving stops up to $58.00 July.  This is a sales solicitation. 

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Energy:​

​Energy continues higher with diesel fuel having made a new high from the April of '25 low.  Diesel fuel is leading the way as just about everything militarily runs on diesel or it's first cousin jet fuel. Crude is right behind it with gasoline bringing up the rear.  The increase cost of diesel will be expected to trickle through every product transported, all the way to the retail price tag.  The US consumer has been dealing with increased core inflation, as well as taxes, but food, except beef, has been moderate in price.  Now, with energy higher, that impacts all things of life, the consumer may start to feel more commodity inflation.  A combination of the two is anticipated to set the consumer back, or at the very least, have them recalculate spending habits. Because this price action is believed due to the middle east, and not a supply or demand issue domestically, there is no telling what energy prices may do.  Therefore, I recommend topping off farm tanks and still booking some spring fuel for planting. ​​

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Bonds:

​Bonds have traded both sides of unchanged so far today.  As I write this they are down a tic.  The US and China are in a loose monetary policy at the moment and that suggests more printing of money and more inflation.  As some state, local and federal taxes are included in the CPI, and not going down, tax inflation is a part we seldom consider as part of the inflation factor, but for all the good the Tariffs may be doing, I have yet to see a tax on anything go down.  Bonds are moving higher with the intent to stimulate, causing more inflation.  When bonds move lower, the Fed is attempting to quell inflation.  So, for the moment, I anticipate more inflation.  The last chart is a weekly of the Dow Jones Commodity index.  It spiked sharply at the end of January on the enormous gains in metals.  As they have calmed down, the index is still moving higher and within a few tics of closing above the January 30 close. This move up now is primarily energy, with minor influence from livestock and row crops. Metals remain in a trading range, well off their highs.  Long way around the barn to say the consumer is expected to see further core inflation a long with commodity, specifically energy, inflation.  Again, do cattle and beef appreciate with this, or hampered by.  So far, the answer is, beef is hampered, but not cattle.   

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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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