Shootin' the Bull about weathering the storm

“Shootin’ The Bull”

by Christopher B Swift

4/06/2026

Live Cattle:

Cattlemen are having to weather some awfully big economic, inflationary, and discretionary spending storms beating down on consumers while laying in feeders at the top of the known price range.  Futures traders have been of extreme benefit in narrowing basis last week and starting this.  Seemingly, the cattle feeder has every opportunity to manage price risk at levels near historical highs on the front end, and a not too badly staggered discount to the back end. ​

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Note the increase of volatility, price expanse, gaps higher and lower, and very little increase of open interest.  All of these factors suggests the price for cattle is not going to remain at this level for much longer.  This may mean fat cattle push above $250.00 and then no telling where from there.  As well, this may mean fat cattle push sharply lower, below $200.00, and then no telling where from there. What we know for sure is that futures prices are higher than they have ever been on the weekly continuation charts and most contract months at new contract highs, with about 25% fewer participants in the futures open interest. For whatever reason, if the Exit door is charged, it appears very narrow.  How about the entrance door?  Could 80,000 new contracts be formed to push open interest back to October '26 levels? Yes, they could, but at a double top, some fundamentals that may be more difficult to overcome than many think, and markets that are much more important to the world than beef or cattle in the line of sight, I don't expect a thrust of new buyers and new sellers. 

Lastly, the narrowing of basis in the back end of feeder cattle will close a huge advantage some cattle feeders have been using to procure inventory in the future at previous discounts.  With those discounts gone, it reflects a starting feeding margin at over $300.00 loss through this year. 

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Feeder Cattle:

Backgrounders saw higher cattle prices in the lighter weights and feeder cattle prices stagnate.  All producers are having to do business at the top end of price ranges for cattle and futures contracts.  At current price structure of the board, whatever you buy today is cheaper in the future.  All contract months of '26, but November, have yet to fill their gap.  November was not on the board when the gap took place.  I have no idea if traders will or won't fill the gap.  As above, I don't anticipate prices to remain at this level for much longer, whether sharply higher or lower. This leads me to recommend producers protect what has been gained and keep hoping the next person will pay more. 

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​Corn:

Corn and beans ended a little higher.  Wheat was soft.  I anticipate corn and beans to trade higher.  Beans are in a fledgling bull market, soybean oil in a bull market, and corn consolidating above a long term trend channel that was broken to the upside. Cattle feeders are dealing with exceptional fuel prices that may or may not have an influence on grains, as they are a component of energy.  I recommend you take action to own the at the money December '26 and July '27 corn call options.  This is a sales solicitation.  In just the past 35 days, farmers have grown to regret not booking fertilizer and fuel.  Today, I recommend you reduce the potential for regret of not owning corn with options.  Options produce the right, but not the obligation to buy or sell a futures contract.  With price expanse of some commodities recently, the few percentage points paid for option premium has paid off in leaps and bounds.  

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Energy:​

It all depends upon the minute you ask, and which of the three is in rotation.  Price has been so volatile and expanse that a quick glance to another market can put your mind in a tailspin trying to figure out what just happened. The rotation is the most interesting.  At times, crude, diesel, and gasoline will move in tandem.  More times than not, one will move abruptly while one or both of the others sells off just as abruptly.  Then, you see reversals where one of the other products takes lead and then pulls the others with it.  The computer programs that run the market are fascinating.  Much more than humans, as at least you could be equal to humans.  There is no way shape, form, or fashion that any human can out do the computer.  This leaves reliance upon fundamentals to be even more important, with the close of the day helping to mute a great deal of the influence markets are subjected to through the day.  I anticipate energy to continue higher.   

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Bonds:

​Bonds and notes were higher again today.  Inflation is soaring and Friday's CPI report is anticipated to reflect such.  Day in and day out trading has been volatile and subject to everything the Presidents states.  Bonds are in a down trend with significant inflation at hand.  I anticipate bonds to continue lower. 

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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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