“Shootin’ The Bull”

by Christopher B Swift

4/09/2026

Live Cattle:

An out-of-town visitation for a cousin and 24-hour stomach bug postponed the past two days of comments. Today's price action is reminiscence of all the rest recently.  That being, higher in the face of overwhelming inflationary factors.  My perception is that diverging spreads are continuing in all aspects of production.  The spread between the risk being assumed by producers, in relation to the inflationary impact towards the consumer, is widening. Packer margins are widening again in a negative manner, cattle feeders continue to bid widening spreads for feeder cattle to fats, and now backgrounders have gone in headfirst, spreading the price wider between light weight and heavier weight cattle.  Now, throw on top of all that, the futures trader having shored up the basis to even, if not negative on the front end, and narrowed sharply towards the back end.  What a change in dynamics the past two weeks while the world is practically at war.  ​

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The past 3 days of consolidation suggests anticipating another new high.  Whether by a little, or a lot is open for discussion. Another new contract high in fats will be anticipated as a wave 5 top.  Whether "the" top or just "a" top remains the question at hand.  All of the above leads me to recommend rolling up lower strike positions, adding to newly acquired inventory, and hoping there are no unintended consequences from the current events that would undo the best laid plans. 

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Feeder Cattle:

Futures traders have leapt out in front to assume your risk at a premium. Do not let this shift in basis to negative go by without doing something to reduce the financial impact that potential adverse price fluctuation would have on all of your newly acquired inventory.  With this most recent shift in basis, it allows for the rolling up of lower strike put options and initiation of fence options spreads, with the short call strike price at what would be an all-time new high of the index. As well, produce minimum sale floors at, or very close to, today's index reading.  Whether "the" high or "a" high, the structure of the board is decisively friendly towards marketing into. The need for working capital is immense in cattle production.  Protecting that working capital is believed a necessity to continue to transact business.  No different than a trader, at this time, I believe there is tremendous rank speculation in the cash markets, for which producers have foregone any form of price risk management, either due to the clarity of hindsight, or simply guided by the supply side of a two-sided equation. Since there is tremendous leverage in the cash markets, as well as futures, due to borrowed capital, this time frame is one to watch.  Like the fats, a new high, above Monday of this week's high, is anticipated.  The interesting part will be whether the gap is finally filled, or new contract highs made, barring November, already at contract high.  

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​Corn:

Corn is believed forming wave 2, with wave 1 being the rally that took prices out of a 2 yearlong sideways trading range.  Current events appear to have created longer term inflationary impacts, even if resolved today.  I do not know if the rise in diesel fuel is a straw big enough to keep a farmer from planting.  Were upside targets in diesel to be met quickly, I think it could have a significant impact on the maintenance of the crop, even if all acres were planted. I recommend cattle feeders buy the at the money December '26 and July '27 corn call options to set a predetermined maximum price for feed, well into the future.  This is a sales solicitation.  Beans were able to shake off the selling more than corn.   This believed due to the importance of bean oil to the biodiesel market.  That is where the demand for energy is. 

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Energy:​

Fibonacci upside targets for May Heating Oil range between $5.50 and $6.00 per gallon. $5.85 is current historical high on the weekly continuation charts from April of '22 when the Biden administration poured money out to the masses.  This explosion of newly printed money produced huge price swings in all markets.  That rally high did not stick around for long with the highest weekly close at $4.78.  Most recent closing weekly high has been $4.60.  As the demand for diesel is not expected to decline, due to ongoing current events, and 180 million acres of corn and beans to plant domestically, demand for diesel fuel is expected to be high.  Wednesday's energy report showed huge stockpiles of crude, with refining capacity at 92%, a staggering amount.  However, this won't keep up with the needs of demand, so I expect a higher price.  

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Bonds:

Interest rate instruments and equities were higher today.  The impacts of current events are believed either being disregarded as short term events, or the continual stimulation and government spending, masking the shifts believed taking place in consumer discretionary spending habits. Friday's CPI number will be a telling tale as to the rise of inflation towards the consumer. ​

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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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