Shootin' the Bull about mimicking previous moves in opposite directions

“Shootin’ The Bull”TM

by Christopher B Swift

7/27/2026

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Live Cattle:​

With a multitude of factors recently culminating at the same time, positions taken prior to these events may need some attention. It was noted often that when the market turns, the contract highs of back months, even though severely discounted, were believed the highest prices going to be achieved. Still, as discounted as they are, with the contract low eyed as the downside target, many may still have $18.00 to $25.00 lower to go.  With earlier action taken, you may consider rolling down higher put option strikes, or if nears the contract low, sell put options at even lower strikes to collect premium and form a bear put spread.  

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As the realization that beef production was catching up to consumer demand, or consumer demand was falling to levels of beef production, there remained questions as to how cattle prices would be impacted.  Now, with the reopening of the Mexican border, the increase of cattle to work with may have tipped the scales. Going forward, I anticipate the positive basis to remain, and that a top has been made in cattle prices. At this time, contract highs are not expected to be revisited anytime soon.  This leads to continuing with the management of risk or potentially the adoption of.  At this point, producers may need, or have, to buy at the money put options to keep from further price erosion impacting margins. This is not the end of the world, it is the end of a bull market and needs to be addressed as such. 

With the free daily commentary quickly coming to an end, start now with the sign up to get on the list.  Email us or call to make sure you don't miss the next most probable move. 

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​​​​​Feeder Cattle: ​

The spread between starting feeder and finished fat was the root cause for the projected negative margins.  The stupendous price increase of fed cattle is what returned the input costs. With no further price increase anticipated for fat cattle, this spread will be anticipated to put a lot of downside pressure on feeder cattle prices, in comparison to fats.  I think it as likely that this decline will mimic the rally from November '25 to February '26.  The first move up was non-stop until the first $40.00 before back and forth trading took place.  The first move down has been $37.00, before starting the back and forth. If the back and forth cannot achieve a price above the 7/21 high, then expect another leg of $25.00 to $35.00 lower.  

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Going forward, the back end will be the most difficult to deal with.  Severe discounts are expected to keep the basis grossly positive.  Along with an already $46.00 drop from the top, backgrounders have more work to do now than they ever did on the way up. With the advent of more cattle to work with, and the increase of beef production from every avenue, the top price for cattle is believed in with expectations of a large price decline to help narrow projected feeding margins. ​

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​​​​Corn:

​Wheat and beans sold off from contract highs made on Friday, and corn a $.66 rally.  I do not believe this is the termination of these markets, but a correction of the higher trading.  Beans and wheat are in a bull market and barring the bull market being complete, I anticipate higher trading in all three. A couple of days sideways to lower and I anticipate the upward trends to resume.

Energy:​

​Energy price movement is dictated by the President's actions towards Iran, and not much else.  The heavy demand for diesel fuel, then gasoline, is keeping products firm, leading to a firm undertone in crude.  All where lower today, but again, coming off contract highs in diesel fuel and gasoline with crude almost a new contract high as well. So, these are still believed bull markets with a pretty good wall of worry to help keep elevated. Diesel remains about $1.00 from the end of June low and about $.80 from the March high.  Corn and soybean producers have decisions to make that I do not envy in whether to book at today's price and be disappointed if lower at harvest, or let it ride and be disappointed if higher at harvest.  A quick pencil to paper should help you make this decision.  Unfortunately, due to my belief that the President is enjoying pulling the strings of energy, there is little way to help decipher the next most probable move using traditional supply/demand factors, or technical indicators.  

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Bonds:

​Bonds were a tad higher, but a range is believed being built in debt instruments.  Dormancy is not abnormal in interest rate fluctuation.  Especially when there is seemingly a need to combat inflation, but those in power want more inflation. For the moment, a stagnate rate market may be falling upon us. ​​​

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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.