Shootin' the Bull about shrugging right shoulders

“Shootin’ The Bull”

by Christopher B Swift

6/16/2026

Live Cattle:​

The on feed report shows marketing's at 89%.  Packers are cutting slaughter rates in the attempt to prop up beef prices.  Box prices are not rising due to increased demand, but from a managed reduction in supply.  Placements, of a little over 92%, reflects the lower herd size, but elevated slightly, due to drought having moved more cattle earlier. This brings the total guess to about 102% on feed, or approximately 11.68 million head.  The reduction of slaughter, in the attempt to increase box price, suggests congestion at the center of the plate remains.  Next comes to whether grocer's and restaurants push the price increase on to consumers, or continue to reduce their margins, or seek them from other items? Seeking profits from other items has become the leader in keeping margins positive.  When "Whataburger" commercials' come on, chicken sandwiches are what they advertise. Last weeks inflation reports suggested that grocers and restaurants mitigated some of the inflation by not passing it along to the consumer.  It will be interesting to see how high packers can get box beef prices, and then to what extent can that be pushed on to the consumer. 

The right shoulder developed a shrug, that didn't necessarily void the H & S pattern, but sure moved it away from a textbook example. Basis improved greatly today, but still at a hefty discount to cash. Higher trading on Wednesday will help narrow the basis and allow producers the ability to shift risks on to futures traders at narrower basis spreads.       

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​​​​Feeder Cattle: ​

The right shoulder on the feeders is just a little higher than the left, still in tact, but no doubt in jeopardy of getting lopsided like the fats.  Traders wanted to participate in the cattle market this week in droves.  Although not much change in open interest, the ability to swap basis from positive to negative is a huge change from the past several weeks.  Now, producers seeking the highest price, will find it in the futures to help manage the starting margin spreads being assumed.  There will be a large upcoming rotation of inventory through the video sales.  Those marketing couldn't be much happier with the narrowing of basis and still near historic price, but those who obtain the new inventory will be doing such with only great expectations of what could be, not what will be.  Think about that as this time frame is quickly approaching.  Something to consider would be that if you are going to pay whatever price necessary to bring home inventory, you may need price protection even more so, regardless of whether it is profitable or not.  Simply the amount of capital outlay will be extensive to manage, let alone the multiple factors that will go into beef consumption, processing, and production that may or may not produce adverse price fluctuation.  

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​​​​Corn:

KC wheat was about the only grain lower on the day.  On the mid day cattle comment, I recommended buying May '27 KC wheat with a sell stop to exit only at $6.60.  Corn and Chicago wheat where a little higher and beans ended a dime higher and a dime off the high of the day.  Bean traders produced a 50% correction from the end of May high.  Beans and wheat are believed in bull markets with current downside price action a correction of.  Corn, having made new contract lows, would be starting from scratch if it starts to move higher.  

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Energy:​

​Energy continues to sell off and is now expected to continue with further reduction of military actions. The question will be now, where does it stop?  As well, what other commodities will it take with it, or unintended consequences produce?  

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Bonds:

​Bonds are higher.  Government spending rampant, and the President likes it.  So, it is difficult to expect much different.  

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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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