Shootin' the Bull about breaking patterns and stretching oneself thin

“Shootin’ The Bull”

by Christopher B Swift

4/28/2026

Live Cattle:

New contract highs in the fats voids the anticipated H & S pattern.  With the last two rounds of recommendations made at previous highs and improved basis, I'll see how high traders push futures in this go around to help gauge the next round of marketing's.  Packer losses are expected to increase this week with higher cattle and no higher beef.  Cattle prices may go higher or lower, but the industry, and its producers, are skating on ever thinning ice with losses and projected losses difficult to overcome.  The above leads me to anticipate the next price move, whether higher or lower, to most likely produce contraction of production, and or, processing capacity.  If higher, and beef does not follow, it will most likely be processing capacity.  If lower, then some are believed to have assumed projected negative margins that may be difficult to overcome.    

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​Feeder Cattle:

Feeder cattle futures have not made new contract highs, with the fats having done so.  The break lower in feeder cattle pushed well below the February high, but in the fats it did not.  The two entities appear to be diverging from one another with packers literally having to pay more to acquire inventory, while cattle feeders seemingly not nearly as aggressive in adding more inventory at current price levels.  The H & S pattern on the feeders has been pretty much broken as well.  A new contract high will reflect how badly someone wants to own your risk at the top of the known market.  As you already own them now, marketing will be the next step, and doing so at the known high is believed as good as the unknown high. 

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The higher trade has clearly increased the optimism of "cattle can't go down".  

​​Corn:

Beans were mixed, but corn and wheat were higher.  Wheat continues to lead the way.  The wheat crop must be in bad shape as moisture added to the plains overnight, and more forecasted, didn't phase the market at all.  Instead, both Chicago and KC were up over $.20.  I anticipate wheat to trade higher.  Corn closed at a new high from contract low.  While still about $.02&1/2 from making a new high, I anticipate traders to push through the $5.00 level.  Too wet in the north is delaying planting, while too dry in the south is making for some early plantings.  Still too early to suggest any problems or shortage of acres, but it's not a very uniform start either.    

Energy:​

Energy was mostly higher with crude sharply.  The military actions are fracturing long held relationships in the middle east as the U.A.E. has left OPEC.  Seemingly, they built a pipeline from the oil fields in the west to the southern shores beyond the Straits of Hormuz, to circumvent Iran.  I'm not sure this is why crude rallied, but it does continue to test the $100.00 level.  I anticipate energy to continue to trade higher.  However, when or if settled, oil will be anticipated to drop suddenly and extensively as there will be hundreds of traders tasked with marketing a couple of years of oil production into the future.  Even at the steep discounts out into the future, these are currently contract highs, and could well be for the remainder of the contract.  

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Bonds:

Bonds were lower with anticipation of a resumption of downward prices. This will raise rates, and most likely needed after today's Redbook sales showed a 7.7% increase and the Case-Shiller home index up about a half a percent.  Core inflation remains elevated, the rate of inflation is increasing, and commodity inflation still rising, as reflected by the commodity index chart below. 

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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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