Shootin' the Bull about wrapping up the week.

“Shootin’ The Bull”

by Christopher B Swift

5/15/2026

Live Cattle:

In my opinion, a great deal of price expanse and volatility took place this week in futures. Literally the same as last week.  Most contract months closed a little lower than last week, but for the most part, the week was filled with $5.00 to $9.00 ranges within the day.  Sometimes more than once.  I didn't see much that changed this week.  Cattle feeders continue to show a little reserve in bidding higher for incoming inventory, as reflected by the CME index.  Boxes are no better and cash dollars higher.  Packer margins could reach $400.00 negative.  This week will be interesting to see if cattle feeders are able to see black ink.  I think they should, as some cattle slaughtered now are ones placed when prices were lower in November, and the increase in this week's price. Of the most interest is that futures continue to hold a hefty discount, leaving dollars of basis risks for producers to contend with.  This diverging factor between producers and futures traders is very, very interesting. Either traders have to go bid to converge basis, or packers reduce processing in an attempt to back cattle up.  Either would produce a hefty move in price.  Backgrounders continued to widen starting spreads between whatever lighter weight they buy and the feeder cattle market.  Drought has been a topic this week. While some rain is forecast, heat is building coming into next week and it may be that weather foils the best laid plans with hay and pasture conditions weak. All of the above leads me to anticipate even wider daily price ranges and continual volatility.  Note the CME raised the daily trading limits to $8.50 Live Cattle and $10.75 Feeder Cattle effective June 1.  I would anticipate the market to be anxious to test these limits sooner than later. 

Thursday and Friday's lower grain and oilseed trading is believed a "buy the rumor, sell the fact" type of trading.  Great expectations for renewed Chinese buying seemingly fell flat.  Wheat continues to be on the forefront a bull market.  A limit higher move this week, and poor crop ratings, reflects how bad of shape the crop is.  With the gap higher filled from the Monday to Tuesday trading, and a hefty correction, I anticipate wheat to resume its uptrend with targets for December KC to the mid $8.00 range.  With both corn and beans a component of energy, I anticipate both to trade higher. 

At times, economies can inflate themselves out of debt, and I believe the President, and market participants, are in favor of such.  Equity indices, grains, and oilseeds were pumped higher in expectation of great results from China.  The Chinese visit apparently wasn't as good as expected, leading to grains, oilseeds, and bonds plummeting.  I have been stating all week that it was amazing bonds didn't move lower with such stark evidence of inflation from this week's CPI and PPI reports. With a little help from Japan, dumping billions of dollars of US bonds on the market, bonds were down nearly 2 big points on Friday.  Energy continues to move higher with a belief the upward trend is still intact.  I anticipate energy to continue higher.  Outside of the cattle, input costs remain elevated. Caution is highly recommended with current basis spreads so wide, and seemingly no curtailment of production or processing capacity.

“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.