“Shootin’ The Bull”
by Christopher B Swift
12/02/2025
Live Cattle:
An eventful day of higher trading that pretty much closed the basis spread shut. Futures traders are believed to have exhausted themselves after the 5 days in a row of higher trading. I recommend with this rally that you do whatever you wished you would have done, prior to sharp break lower. While only having met a .382% retracement level, get started on the marketing's you will need to accomplish. Note that cattle feeders will continue to have the most expensive inventory on feed out to April.
Feeder Cattle:
As above, futures traders slammed the basis on the January contract and made great headway towards in all other months. The current wide swings in basis is abnormal. Especially the time frames for which it is moving in by nearly $40.00. This leads me to continue to anticipate contraction taking place in the price ranges most recently traded. While the reopening of the southern border looms, I think a great deal of that issue has already been traded in the markets. Were prices to continue lower, setting new lows under last week, I would anticipate this selling to be caused by outside market's or foreign markets influencing consumers discretionary spending habits. From the statistic's I've read about the increased usage of financing necessities, I recommend you keep a close eye out for situations outside the cattle//beef realm that may influence the price of.
I recommend selling all previously recommended January long call options and initiate short hedge positions on anything you wish you would have when prices on futures contracts were at their lows. This is a sales solicitation.
Corn:
I have not a clue as to why corn rallied, other than my recommendation to sell or not buy. Beans though sold off and are believed going to form a bear market that is anticipated to exceed the starting point of the most recent rally. I believe that beans are higher upon expectations of a deal with China that may or may not come to fruition. If found that China isn't going to purchase any more, purchase only what they have too, to keep Trump from rattling sabers, or worse, cancel current purchases, there would be little hope for beans. Even if you do not wish to be short, I recommend you do not be long soybean futures, at a $.75 to $1.00 negative basis and at less than 42% carry. Owning, or re-owning beans with futures, or worse options, is not recommended due to the significant disadvantage it places you in.
Energy:
Energy started off soft, then Putin opened his mouth and spewed out some form of war mongering with Europe, causing diesel fuel to push sharply higher in minutes. As they day dragged on, all are lower on the day with expectations of a resumption of the down trend in crude oil. Were some form of peace to actually be agreed upon, I would anticipate a sharp break lower in energy.
Bonds:
Bonds were plus on the day, but not by much. Japan is having economic issues that are believed a drag on US bonds, due them being the largest holder of US debt outside the US. Were they to have a need to liquidate, there isn't anyone else but Peter and Paul, (the US government) to buy them. Regardless of Trumps desires to stimulate, were inflation to continue to rise and the Fed cuts, banks will be the biggest benefactor of such. Borrowing it for less at the Fed window and loaning it out at a higher rate to help curtail inflation, seems like a winning spread for banks. The bigger question to be answered will be, "will rates be cut in December?" With the Poly market odds now over 90% for a cut, bankers may be salivating like Pavlov's dog.
The Sunday evening news program, 60 minutes, produced a story about the Poly Market on last weeks episode. Here is the link on YouTube for it. I found it to be very interesting and we do enlists it's services when in question.
“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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