“Shootin’ The Bull”
End of Day Market Recap
by Christopher B. Swift
3/17/2025
Live Cattle:
Futures are responding to last weeks higher cash trade. Cattle feeders continue to see spreads widen further as feeder cattle make new highs in both cash and futures. Open interest is increasing as the there is no doubt of the interest in this market. Boxes jumped over $6.00 today, further exposing the manipulation of the packer to find margin through slaughter cuts. Soon pushed to the retail shelf or menu price, the already highest price is expected to be higher as few grocers or restaurants will want to reduce their profit margins. All price advances tend to curb demand and encourage alternatives. Processors are building more capacity with woefully too much at present. Producers are growing cattle, any size, to larger in order to profit from. Cow/calf operations are just now seemingly starting to swap from breeding old cows to holding back heifers. While this may take some inventory off feed, I don't think it will do much towards a decrease in beef production. The balance was pretty steady while heifers were sold readily and old cows held back for one more calf for the past two years. That is now starting to change with a slightly higher cow and lower heifer slaughter.
Feeder Cattle:
Futures traders are continuing with what was noticed last week. That being, all contract months are now in a negative basis. Futures traders have not offered this since September of last years break lower. It is back now and believed an opportunity to lay off newly acquired inventory at a premium with aspects of a predetermined amount more. Open interest increased as well in feeders. This is where the most interest should be as cattlemen are literally paying retail price for all inventory through the sale barns and video sales. Until the end of last week, that was the most expensive place to buy inventory, but now the futures are. The amount of working capital at risk leaves no room for error, either way. You are managing risk through a believed time frame of a fundamental function of greater vertical integration. With so much processing and production capacity, and fewer animals to go around, I expect great accomplishments this year.
Corn:
Corn was higher. There is little to move corn in one direction or the other. I continue to anticipate corn to move higher.
Energy/Bonds:
Energy has been higher today. Crude gave back the majority of its gains, but both diesel and gasoline held on. At this time, I continue to expect energy to trade lower. Bonds were a little higher with an FOMC meeting this week. Retail sales were higher, but missed expectations. Bonds are not trending at the moment and I am unsure of their next most probable move at this time.
“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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