Shootin' the Bull about 5 waves up

“Shootin’ The Bull”

by Christopher B Swift

6/30/2026

Live Cattle:​

The six year and two month long bull market in fat cattle is believed complete.  The weekly continuation chart shows the 5 wave sequence from the 2020 low.  There are subwaves within the major wave count with the peak coming on the lowest oscillator reading of the major 5th wave. With June off the board today, the price of August picks up, and overlaps the previous highs made of the intermediate wave count in green.  If closes this week under $246.57, it will have broken the last up trend line able to be drawn at this time and overlapped the minor wave I high. Next support is $235.00, followed by the 1st trend line at $217.00.  

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I recommend you buy the at the money call option to stop further price erosion.  Basis is another factor to contend with, and leaving the top side open for convergence to cash is a way to allow for.  It won't help anything if convergence takes place at levels of futures.  There isn't much that will. Read the first sentence again. 

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​​​​​Feeder Cattle: ​

August futures are $13.05 from last Thursday's high.  Basis is widening and you are about to market a huge swath of inventory over the next 6 weeks.  I recommend buying the at the money put option on the August contract and liquidating it the day the gavel slams on your load of cattle.  The wider the basis spreads, the more risk you will be assuming.  Since there is ample time for convergence after the sales, basis spreads can widen and narrow dramatically.  For all other contract months, discounts are creating more risk to assume.  

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We have the ways and means to help you protect what has been built over the past 6 years and 2 months.  Whatever you may not have made, due to using risk management in the past, should have no bearing on the decisions you face today with mounting working capital at stake, and noticeable congestion at the center of the plate.  Read the first sentence above again.

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I recommend buying the October $310.00 or $300.00 put option.  The October - November '25 drop was $81.00.  This strategy is a way to use the leverage available to you. 

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​​​​Corn:

All three were privy to a little short covering after the report this morning.  Computer trading did most of it, as the days range was made in approximately 1 to 2 minutes. Partial gains were held and we'll see if this was a one time event, or potentially a reversal. 

Cattle feeders are reminded again of the polar opposites in price of the two main ingredients of beef.  Feeder cattle are so high, the procurement of creates a significant negative margin at the start.  Corn has been such a small factor in feeding margins that it would be difficult to benefit much with a lower price, but could be detrimental were sharply higher.  ​

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Cattle feeders are recommended to buy corn call options in the months needed for delivery, at strikes they no longer wish to pay for corn.  

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Energy:​

Crude and the products were mixed with products a little higher and crude lower.  Diesel fuel is approximately 21% off the high. With solid demand for, farmers are urged to top off farm tanks and book a percentage of fall harvest fuel needs in hopes of averaging lower, but more prepared if having to do so higher.  

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Bonds:

​Bonds were a little lower.  There is no let up in desire to continue to inflate, so I don't expect bonds to trade lower.  

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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.