Shootin' the Bull about mitigating the news

“Shootin’ The Bull”

by Christopher B Swift

​10/23/2025

Live Cattle:

It took just minutes for bulls to dispel any relief that may come from importing Argentinian beef.  Calculators were humming this morning to see just how insignificant the amount of beef coming in may be.  Everyone has stated the exact same thing, it won't help to lower beef prices. I agree, it won't bring down consumer beef prices, but disagree that it won't help.  It will help those who produce processed or ready to eat meals.  I don't think the consumer will notice one penny difference, but any lower price paid for procurement of lean trimmings will increase the profit margin of that business.  Helping one business or maybe several will be that much less demand noticed at where ever they were having to procure from.  A trickle, yes, but most likely enough to have shifted the psychology of the cattle feeder, recognized by the reversal of the spread between starting feeder and finished fat.  As well as having captured the attention of the President, the situation has reached a level of exposure for which few do not know about.  The increased level of awareness is creating a firestorm on social media with everything from the staunches of protectionism to having to contend with a consumer grown weary from inflation. For the moment though, the procurement/marketing schemes of production have been altered. 

Battles of overwhelming odds have been won or lost by a single, small event having taken place that eventually shifted the tide of war.  I believe this situation to be one for which risking the outcome of the war, based upon a battle you feel can't be lost, to be unwise at this time.  Futures traders will be expected to leap out in front of any further increase of supply news or weakening demand, further widening the positive basis, exposing producers to not only price directional risk, but basis risk.    

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Feeder Cattle:

Cattle feeders are believed going to breath pretty deep before subjecting themselves to more egregious placement spreads.  This is being reflected in the spreads between feeders and fats having reversed significantly the past two trading days. A long conversation Wednesday afternoon had me looking up the drought monitor this morning. Drought is an issue in the panhandle of Nebraska with most all of Texas, Oklahoma and Florida in some degree of drought. Texas and Florida are two of the largest cattle inventory states that are in a very serious long term drought.  I believe this issue has the potential to exaggerate movement of cattle in the next few months with expectations of increasing marketing's for cattle to go on feed. 

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All contract months have now exceeded their end of August high.  Due to having sold off sharply, when the August high was made, this price is believed a very good price, even though not the high.  However, neither you or I knew where the high was and having marketed into on the way up, has helped average a higher marketing price.  With the recent widening of basis, digging the tiger trap, backgrounders are quickly finding themselves losing not only premium, but basis advantage, that just last week was negative.  I anticipate a move down to the September 17th's low per respective contract month.  The Head & Shoulders pattern, shown on the March contract below, is believed a good depiction of what may take place. If the pattern unfolds, producers will have great benefit in marketing and procurement points of interest shown on the chart.  If only materializes half way, following the pattern may or may not produce beneficial consequences. If wrong all together, and cattlemen go bid for inventory again, it will be difficult to assess which companies, and when, production and processing will be cut drastically.   

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​Corn:

All were firm as grain and oilseed producers are in hope that the President can work to increase the price for grains, as much as he may attempt to decrease the price of beef.  Corn and beans moved higher and corn believed having completed a minor wave I and II, with a wave III anticipated to exceed the current high of $4.59&1/2 July.  March beans are nearing the first of three down trend lines drawn.  I expect each to be exceeded, leading to a potential high of $11.30 March soybeans.  I recommend cattle feeders fix variable feed costs.  This is a sales solicitation.  

Energy:​

​Energy was sharply higher today on apparently the sanctioning of Russian oil.  This rally may well be a wave 2 correction of the initial wave down.  My expectation was for a weakening economy to further impact consumer spending on energy.  I continue to believe this with the most recent two day action a correction before a larger move lower.  Recall the President wants cheaper fuel for the consumer as well.   

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Bonds:

​Bonds sold off today, but at the close, had already begun to climb back up the stairs.  I anticipate bonds to continue higher with a spurt higher soon, as there has been a lot of trading around this price range and seemingly the government is having to buy a great deal of its own debt.  Were some form of trade deal to be made, it is possible that the buying of US debt could be a part of it. More than anything stagflation continues to be ever present, along with still a 2% to 3% core inflation rate.  Recall only the rate of inflation has gone down, not inflation. Commodity inflation, barring coffee and cattle, is very low.  Sugar, Cotton and Milk are all nearer contract low than anywhere near high. Even Cocoa, the most incredible commodity market seen so far with a  489% gain in price is back closer to the low than high.  For comparison, the rally in feeder cattle has been 227% from low to high. Barring coffee and beef, all other edible commodities are not imposing significant price duress on the consumer. It is core inflation that is impacting consumers and that is not expected to decline anytime soon.  

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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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