Shootin' the Bull about turning corners

“Shootin’ The Bull”TM

by Christopher B Swift

7/15/2026

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Live Cattle:​

The price erosion has created an exceptionally wide positive basis, leaving producers with the aspect of "damned if you do and damned if you don't."  Hedging here is over $19.00 lower from the top, and $15.00 lower than when a bulk of recommendations were made.  Not hedging here continues to expose producers to further price erosion.  Hedging here will relinquish a portion of the basis, equal to the premium paid for the put option.  So, of the $15.00 to $20.00 basis spread, the premium paid for a put option will consume a large portion of.  By using put options, you avoid fixing the basis, allowing for whatever convergence there may be to take place. 

Technical indicators are into oversold levels.  At times, this scenario can produce the largest moves.  Combined with the extent of the positive basis, a rally is anticipated, but when, and by how much, is yet to be discovered.  The gap lower opening on Monday of this week is a target to shoot for before making further sales.  Today's price action feels a lot like a "have to" trade in which longs, and slow to react producers, just capitulated through the day.    

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​​​​​Feeder Cattle: ​

There is no difference in the comment for feeder cattle as to what was stated on the fats, except the price decline, width of basis and option premiums are even more severe.  

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​​​​Corn:

And just like that......corn is $.43&1/2 higher off the contract low.  Wheat led the way, as anticipated, with beans closing at a new high from the June low, and only $.06 from a new contract high.  This leaves corn bringing up the rear.  Corn is expected to continue to trade higher and cattle feeders are urged to own the call options at strike prices you no longer wish to pay for corn and in the time frame needed for delivery.  If feed is an issue at the moment, buy 2 at the money September call options to create a 100% Delta factor at entry. September holds a $.22 discount to December and I don't expect a great deal of new crop deliveries against the September due to this.  ​

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Soymeal has a significant price bottom with fledgling attempts to trade higher.  Pork, poultry, and aquacultural producers are urged to consider the price of meal, what can happen in the future, and take a proactive stance on keeping input costs in check, at levels you pick.  

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Energy:​

Still blowing and going for energy. Although closed slightly lower on the day, diesel fuel made another new contract high today.  Gasoline was firmer and crude jockeyed back and forth.  Spreading continues to be noticed with the products tending to be in more favor than the crude.  This is believed a function of refining and the high demand for diesel fuel.  Keep farm tanks topped off to help average the price rise.  Farmers are believed in a quandary about what to do with fuel for harvest.  At already a dollar higher off the low and about $.80 to get to the March high, there is no simple decision here.  

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Bonds:

​Bonds are firm, but not by much. Recent inflation data has excited the news feeds with lower inflation.  That is not the case, it just didn't rise as much as they thought.  With the sharp rise of energy prices in July, revisions will be anticipated in the August reports. Nonetheless, government spending is elevated, taxes are increasing, and every insurance premium I have paid this year has been more than last year.  There is no lower inflation. ​​

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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.