Shootin' the Bull about some moderation

“Shootin’ The Bull”

by Christopher B Swift

​11/18/2025

Live Cattle:

The abnormalities of the past couple of years are believed moderating.  Finding equilibrium isn't going to be easy, but whether basis spreads, cattle to box spread, or box to retail spread, it appears all are narrowing.  This suggests margins are going to be squeezed tighter for all. Prior to the price break lower in beef and cattle, it was extremely lopsided for which one side had all the margins. Now, margins are shifting, allowing for more participants to remain in business than were the one sided affair to have continued.  All of the above leads me to remain net short with any upside potential desired to be attempted captured with a long call option only.  

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Feeder Cattle:

Two patterns can be drawn from what is available so far.  One suggests that a 5 wave move has been completed with a 3 wave move higher to follow.  The other suggests a sideways triangle has been created after the first move down. The sideways move has unfolded into a declining 5 wave pattern.  Upon completion, another wave lower would be anticipated.  For the triangle to remain intact, prices need to remain below the 11/11 high per respective contract month and exceed current low made on the 14th. For the time being, I think it more likely to create a C wave rally until further evidence is gathered on the time line of reopening the border and or further reductions in tariffs.  Although cattle feeders may not be as aggressive in bidding as previously, the newly formed lines of vertical integration will keep cattle feeders buying whether they want to or not.  I think the key will be what the farmer/feeder does over the next few weeks. If they are unloading at the moment, will they reload, or sit through winter with stored corn?  I don't know either, but it is possible they benefited enough to try it one more time.   ​

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​Corn:

​Corn was mixed with beans soft.  Wheat was lower, but not by much.  I recommend buying July Chicago or Kansas City wheat with a sell stop to exit only at $5.55 Chicago and $5.48 KC.  This is a sales solicitation.  I anticipate wheat to trade higher, with corn and beans climbing a wall of worry. 

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Energy:​

​Energy was higher, but diesel fuel skyrocketed.  Up another $.14 today and less than $.10 from contract high made in 2022.  This appears as a refining problem, due to crude oil not leading the way. As well, with the diesel fuel making all the headway, it will be inflationary to everything transported, regardless of by what means, except maybe mule and wagon. 

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Bonds:

​Bonds ended the day softer.  With the desires of the current administration to stimulate, and there appears a tiny bit of commodity inflation that could grow, I more reasons to expect inflation than deflation or recession.  The head & shoulders pattern will be confirmed with a trade under 116'10 or voided with a trade above 119'19.  One may want to be in contact with lenders to see what may or may not be done about rates going forward. 

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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.