Shootin' the Bull about it could be worse.

“Shootin’ The Bull”

by Christopher B Swift

6/02/2026

Live Cattle:​

A softer close, but could have been a lot worse considering the low of the day.  There was some rumblings about a meeting with Brooke Rollins on Tuesday.  As I write this just after the close, I have not seen anything. Topics ranged from the screw worm to Brazil tariffs on beef.  Neither appear bullish towards consumers eating more, or willing to pay a higher price.  With supplies of cattle and beef about steady, demand will play an even bigger role than previous.  As it appears that beef demand is softening, but not cattle prices, producers are expected to see worsening projected margins.  When combined with a sharp positive basis, producers are simply assuming more of the risk associated with the potential for adverse price fluctuation. 

Chart pattern remains the same with expectations of a decline down to the March low per respective contract month.  What follows is the bigger question.  Do cattlemen keep enough leverage to maintain the higher cash price, or do we see cash soften to the levels of futures? If cattlemen can maintain leverage, the right shoulder will have an opportunity to be created.  If wrong, it could mean new contract highs, or no right shoulder to market into.     

​​​​Feeder Cattle: ​

Feeder cattle futures are consolidating.  The range is narrowing with more trading taking place at the lower end than higher.  I anticipate feeders to move down to the March low per respective contract month and then we will see if cattlemen can keep feeder prices buoyed enough to cause basis convergence with futures higher.  With this being a significant time frame for annual sales, I recommend you review your positions to see if any previously purchased derivative could be rolled up to increase the minimum sale floor until the gavel slams on your load. I know most of the sales won't coincide with the expiration of a futures contract.  Therefore, use the August long put option only, and the day your cattle sell, offset the option for whatever premium remains, subtract the loss or add the profits to the cash sale and off you go to the next load.  ​

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​​​​Corn:

​Dismal is about the best word to describe grains.  The loss of momentum from energy, and unable to move higher on their own merit, has pushed grains into a bear market and oilseeds trading sideways. The new low under 4/10 voids any chance of that new high being the wave 1 of 3.  Instead, for the moment, until a new contract low is made, this decline could be a wave C of still a major wave 2.  While this could be a strong move higher, it would be anticipated more bullish deep into the future.  Cattle feeders are urged to consider what price they don't want to pay for corn and own the call options at that level.  While you are looking deep into the future, look at November '27 beans and the uptrend they are in.  Ownership of bull call spreads may be a way to capture upside potential with limited risks to the premiums paid for the spread.

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Energy:​

​Still moving higher.  I anticipate energy to continue higher.  Barring a peace deal, a real one, there is not anticipated to be any resolve of the military actions concerning Iran. Especially from Iran.  Upside target is new contract highs.  The weekly continuation chart suggests a potential equaling or exceeding the June '22 high close at $120.67, or exceeding it.  I recommend keeping farm tanks topped off and remain very unsure as to whether to bite the bullet and book fall harvest fuel, or see if some sort of agreement can be met, that may reduce energy prices. 

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Bonds:

Bonds are higher and next week will be filled with more short term debt sales as quantitative easing hums in the background, helping to fan the flames of inflation and most likely for higher equity prices.   ​​

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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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