Shootin' the Bull about exchanging optimism for hope

“Shootin’ The Bull”

by Christopher B Swift

​12/08/2025

Live Cattle:

I have read on Cassie Fish commentary that Argentinian cuts, specifically filets, are now being sold on US store shelves labeled ​"Produced in Argentina".  This is believed a seismic shift for the cattle/beef industry.  With only cattlemen so optimistic about cattle prices moving sharply higher, and no one else the same, I think it possible, if not probable, that cattlemen shift from optimism that prices will move higher, to hope that prices will move higher.  The unfolding of such a sharp move higher has been difficult, to say the least.  The waves are abrupt, and have produced significant price fluctuation in a very short period of time.  I believed last week that a top had been made.  The start of this week, although lower, doesn't add any credibility to my analysis.  So, with recommendations last week, believed having made good headway in preparing for a descent in price, I am going to wait to see if another new high materializes on Tuesday or Wednesday to lay off risk on any newly acquired inventory and tie up any lose ends that may have unraveled on this rally.  

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I anticipate fewer cattlemen will use any form of risk protection into 2026.  Some will continue to use it, but will assume so much risk themselves, before the protection is of benefit, it will only go to exasperate the situation. I recommend you use the full capabilities of risk management to help mitigate the potential for adverse price fluctuation.  The industry itself is in turmoil and most likely not going to find some resolve before the end of next year.  I believe this years rally will cause fewer producers to use any form of risk management.  I believe that this factor will help drive the market sharply lower as those who forego risk management when conditions are improved, will be forced to take action as the market is moving adversely.  

Feeder Cattle:

​I think the feeder cattle market is the most susceptible to a large price decline.  Negative closeouts were worse last week and projected margins deep in the red.  Cattle feeders, regardless of optimism, can only do so much, and once they have paid top dollar for newly acquired inventory, there isn't much left to do but hope someone else will pay you even more for them.  The spreads between starting feeder and finished fats continues to hamper cattle feeders.  With carcass weights continuing to increase beef production, the beef/dairy cross humming efficiently in the background, and now imported cuts in competition with US cuts, the slope of hope is believed to have turned down an degree of angle. 

Backgrounders have a plethora of derivatives to choose from to help them manage inherent price risks.  I recommend to not use out of the money puts to help offset risk.  The basis is already positive and if assuming more risk by buying a lower strike to "save money" on hedges, I believe you will simply lose that much more before the hedge begins to help.  

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The wave count I showed on Friday remains valid.  Today's lower trade though does create the potential for one more new high close above last Friday's.  When viewing the January, close only chart below, note that there are 4 waves visible.  This leads me to anticipate a 5th wave or new high close. This will lead me to want to wrap up hedges on any remaining newly acquired inventory.  Were a new high to form, it would lead me to want to sell call options on anything that only a put option was initially recommended.  I recommend buying the at the money put and selling the $20.00 out of the money call to form a fence options hedge on spring months.  I recommend buying the August feeder cattle puts and not do anything with the call options.  These are sales solicitations.   

​Corn:

​Soybeans are selling off.  The expectations have fallen flat with China and bridge payments are on their way.  I recommend taking those bridge payments and buying at the money puts on December '26 corn and November '26 beans.  This is a sales solicitation.  With acres anticipated to be equal to last year, South American production up, and livestock production world wide not exploding, or expected to, this bear market in grains and oilseeds is anticipated to last longer than many think. There was great optimism for a trade deal, but that has not come to fruition.  Therefore, grain prices may decline on a slope of hope.  Basis is terrible and the carry charge worsening.  Now, with little help from export sales, and confusion among our leaders as to the difference between the end of the year sales and the end of the crop year sales, I anticipate corn and beans to move lower.  I don't think Tuesday's WASDE report could be bullish enough to reverse these factors.  Especially were energy to soften as well, taking away what little support bio-fuels are currently providing.     

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Energy:​

Energy was lower today. With the price rallies in diesel fuel and gasoline attributed to refining issues, and not supplies, any curtailing of the events causing the disruptions in refining, would lead me to anticipate a sharp drop in energy prices. 

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Bonds:

​Bonds were lower today as inflation is more prominent than recession.  Mainstream media this weekend touted the further divide between Main Street and Wall Street.  Since a great deal more consumers live on Main Street than Wall, this factor should be noted when considering the beef demand, willingness to pay and increased consumption, would need to be overly extensive to sustain the current optimism of cattlemen.    

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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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