Shootin' the Bull about still lower to go

“Shootin’ The Bull”TM

by Christopher B Swift

7/28/2026

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Live Cattle:​

From the low of July 20, daily volatility and price expanse soared.  This past 7 day time frame is believed a running correction.  This suggests that the volatility and wide price expanse is the correction, although still moving in the direction of the main trend.  So, just like what happened on the way up, when there was similar consolidating price action, in the same direction of the main trend, and then another spurt higher, this decline is expected to be the same way.  Today's rally high may well be the termination of the wave 2 or B with a wave 3 or C still to come. 

Nonetheless, the bull market is believed complete and so far, this is only the first decline from the top. If you are caught with no downside protection, are in disbelief prices can go lower, or in a loss already you don't want to have worsen, then buy 2 at the money put options to create a 100% Delta at inception.  This will stop any further downside price detriment, but will subject you to the premium paid for two options instead of one.  Lastly, do not skimp now.  You could have $20.00 higher, but not now.  ​

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​​​​​Feeder Cattle: ​

The price of feeder cattle rose because cow/calf operations have yet to expand and the closure of the Mexican border limited the amount of inventory available. The price of feeder cattle are anticipated to move lower because cow/calf operations are believed on the cusp of expansion, albeit not expected to be extensive, and the reopening of the Mexican border to more cattle.  The congestion at the center of the plate became the warning shot fired over the bow, with the reopening of the border the sinking shot.  No doubt there will be exceptional rallies and maybe some time frames of higher trading.  Unfortunately though, the spreads between contract months are telling the truth, the front has to converge with cash in the current positive basis and there are expected to be more cattle to work with going forward. 

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I urge you even more now to do something to protect what you have left, as you have seen what can take place, and know that this is only the first move down. Expect more abnormalities than normalcies.  We have the ways and means to help, but you have to want to help yourself.  

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​​​​Corn:

The new contract highs last week in beans and wheat, coupled with the rally off contract low in corn, leads me to believe grains and oilseeds are in fledgling bull markets.  There is a steep wall of worry to contend with that should give buyers opportunities to buy when bears mount attacks, like on Monday.  I recommend producers continue to secure feed stuffs with options or forward contracts.  Reliance upon an ever higher cattle trade has come to an end, suggesting great need for management of outside the cattle input costs. 

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Energy:​

​Diesel fuel continues higher.  Oil is not the problem of inflation, it is the lack of refining capacity and heavy demand for diesel that is inflationary. I anticipate energy to continue higher.  No doubt, corrections of significance will be anticipated, but the trend is higher and there has never been a more influencing or volatile President on commodity prices than Trump.  

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Bonds:

​Bonds were a tad higher.  Notes were a little better.  Rates are not anticipated to be changed this week from the Fed.  With the ten year note having made a new contract low this week, and most debt tied to this derivative, rates are already higher. ​​​

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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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