“Shootin’ The Bull”

by Christopher B Swift

4/22/2026

Live Cattle:

There is not a great deal to discuss.  Consumers appear more impacted by the 5 years of inflation, the persistent and elevated rate of inflation, and most recently a significant rise in commodity inflation, than cattlemen anticipated.  The top of the cattle market is believed being made from shifts at the center of the plate. This has been commented on and noted as a belief that the cattle market was priced at levels for which little else supported.  Nonetheless, cattlemen continued to fill too much production and processing capacity and drove the price to new records, and potentially some, out of business.  If further evidence supports this thought process, it won't matter any longer how few cattle there are, as I anticipate expansion to have already started, with the beef/dairy cross growing, and a lot of dairy cows to cull. 

 

I recommend making marketing decisions based upon the forming head and shoulders pattern.  With today's close at the top level of the left shoulder, one would have to believe that after the neckline was created, prices would return to above the level of the left neckline to achieve a price higher than today. What I don't know is whether traders will simply push futures back to where this last rally started from at around $224.00 October at one time, or will stair step it down.  With ideas of price action riding escalators up and elevators down, one will need to do some hard thinking about consumers increasing willingness to pay or consume more, grocers/restaurants shift in pricing to attract consumers to beef items, and packers desire to bid higher with margins deeply negative. 

 

​Feeder Cattle:

Harder decisions are going to have to be made in feeder cattle, as futures traders have widened basis and pushed all contract months below the left shoulder high made in February.  As well, it is believed that backgrounders entered into the widest projected negative margins in history last week when viewing light weight cattle against feeder cattle. To help you simplify this ordeal, consider a few factors. One is that you have had three marketing opportunities in the past 6 months over $365.00. Two of them over $375.00.  At today's close of August, these three highs are $16.15, $6.62, and $19.05 from the three highs. So far, from contract high, August is down only 5%.  Commodity markets can move double digit percentages in very short periods of time and only 5% from all time high and known high.  Another is that current basis is weak, at over $19.00 positive.  However, with an options strategy, one can mitigate a portion of the basis spread, lower the premium for the put, and produce a higher marketing floor than with just a long put option.  Lastly, a return to the November of '25 lows, or exceeded, is anticipated. 

 

I recommend making some of the most difficult marketing decisions, potentially for the year, sooner than later.  I recommend rolling up lower strike price options to at the money and add to whatever new inventory you have acquired recently.  If utilizing alternative risk derivatives, consider how a futures or options position could help to secure more of the recent price rise, or help in collecting option premium that may or may not be of benefit in your risk management plan.  Today's Daily Livestock Report newsletter was all about hedging with good points on management of this much risk being assumed. Whether you want to or not, blinded by hindsight, or void of foresight, the risk you have assumed is the most any cattle producer has assumed via price spreads in history.  Use the Head & Shoulders pattern for reference in helping you to market, and continue to hope that I wrong about producers willing to pay any price to remain in the cattle business.   

 

​​Corn:

A mixed bag, but mostly lower. Corn was the only one of the three to stay plus.  Wheat and beans gave back most of what they had gained from Tuesday.  I continue to anticipate grains and oilseeds to trade higher.  ​

 

Energy:​

Energy is sharply higher again today.  Diesel fuel is knocking on the door of $4.00 again spot May.  June has narrowed the inverted carry spread sharply over the past couple of days.  I anticipate a squeeze on May diesel futures as demand for is only increasing with military actions continuing and planters on the roll to plant 180 million acres.  

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Bonds:

Bond and note prices remain in a very stagnate trading range as the conflict between needing to raise rates and a want to lower rates clashes.  Any thoughts on price direction of bonds and notes is up in the air with these two factors meeting head on.  So, for the time being, I have no idea as to whether rates will be raised, lowered, or allowed to wallow while core inflation, the rate of inflation, and now commodity inflation continues to climb.  

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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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