Shootin' the Bull about no weak hearts

“Shootin’ The Bull”

by Christopher B Swift

6/04/2026

Live Cattle:​

​This is no place for the weak at heart. Few fundamentals appeared to have changed this week, leading me to anticipate more volatility and price expanse. Traders and market participants will have to contend with excessive price movement in futures, that doesn't appear in cash trading, for a while longer it looks like.  More discussions arise about number of days on feed, the fat these extra days produce, and the inventory to work through, as packers continue to throttle back slaughter pace. To say these are perilous times is an understatement. While most blame the packer, I don't see any ambition towards cattle feeders to offer larger volume each week to clean up the growing percentage of inventory over 180 days on feed. Both production and processing are being manipulated in a manner that attempts to return profit.  Packers have little to nothing to show for their manipulation, and cattle feeders have seen mixed results, but mainly due to what they paid for feeder cattle in the past. With summer progressing quickly in heat, some of those longest fed may need to be moved sooner than later. 

While cattle are in a whirlwind pricing scheme, corn has plummeted.  Off $.50 from it's high, cattle feeders can manage price risk with call options on July corn to the tune of approximately $.02&1/2 cents per month.  The $5.00 July corn calls closed around $.28&1/2.  July corn is at $4.80.  Although this year's crop may be a little larger in acres planted, yield will be of issue.  I know there is so much hype about the cattle market. Due to the exceptionally high price for cattle, and historic projected losses, the other input costs can be the difference between profit and loss 12 months out. Especially with so many long fed cattle and drought going to push lighter weight cattle on to feed.  There is no shortage of concerns in cattle/beef production today.    

​​​​Feeder Cattle: ​

A shallow victory was experienced today with most futures contracts having met or exceeded the March low.  This helps to form the neck line with expectations of the creation of a right shoulder.  Honestly, I did not think the shoulder would be created in one day, but it got an awfully good start on it.  Weeks of sideways to higher and lower trading is now expected. As like when the rock is thrown into the pond, the first ripple is the greatest, and then they begin to meld back into the calm. The significance of the trading range, and limit higher move will most likely make the second ripple as noticeable as the first. 

I think the next shoe to drop, were there to be one, will be consumer sentiment towards this.  How this issue is displayed to the general beef eating public will help to determine the next most probable move.  If spun in a negative light, consumers may show some reservations, even if known is not transmissible.  I can't see any positive light for the worm, but some think it will be bullish due to either actual infestation reducing the herd, or potentially, I'm not sure what else.  I can't really foresee a cattle feeder suggesting they want to pay even more for inventory when the situation has some potential to be shunned by the consumer. Note that option premiums will most likely remain swelled into tomorrow's close.  With the significance of today's rally, I think it worth mentioning again that if you didn't like where prices were on the opening this morning, do something about it when prices are higher.  The volatility of this situation can make for a very uneasy time frame going into the video sales.  I don't think you are out of the woods, just maybe a clearing.      

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​​​​Corn:

​If Wednesday's trade was dismal, today's was down right disheartening. Not even a dead cat bounce on any of the grains or oilseeds.  Trade deal's and China hype have all been disregarded by traders.  The blow to farmers is all benefit to livestock producers.  However, livestock producers have to do something about it.  Buying call options on July '27 corn today is like buying flood insurance on the sunniest day of the year without a rain forecast in sight. That is when the insurance premiums are the least expensive.  Consider that as you contend with feeder cattle prices, the projected negative margins, and what may come next from the worm, or this administration.   

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Energy:​

Energies breathed a little today.  The wide daily ranges are nothing new and there doesn't appear to be any resolve of military actions in the middle east, regardless of who is doing the acting. Energy remains in a bull market with expectations of still higher to go.  ​

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Bonds:

Tuesday's comments are the exact same as today.  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.