Shootin' the Bull about preparing

“Shootin’ The Bull”

by Christopher B Swift

​12/09/2025

Live Cattle:

Some fats made a new high in this rally and others did not. None seemingly produced a new high close.  So, I don't know if there is another new high or not.  Regardless, I think it time to lock in as much inventory as possible with an at the money put option.  Then, if market trades lower, you will glad to have them on.  If the market trades higher, there may come the potential to sell calls or simply potentially benefit from a higher cash trade.  Fats are anticipated to soften, but feeders are expected to sell off sharply.  

Feeder Cattle:

I anticipate feeder cattle to sell off sharply and maybe even produce a counter seasonal trade for which prices tend to rise from the first of December to the middle of February.  When the first break came in 2015, it started in mid-December and ended at the end of February.  The increase of optimism of cattlemen, in comparison to packers, grocers, restaurants and consumers, seems grossly over weighted.  As well, projected losses will only increase with the spread between starting feeder and finished fat if continues.  I fear cattle feeders using cheap feed in an attempt to grow their way out of projected losses.  Previously, there were few indicators that price wouldn't just keep going up, and therefore cattle feeders continued.  Today, the optimism isn't believed shared by nearly as many and therefore not expected to be able to sustain paying a higher price for incoming inventory. ​

The new high close did not materialize today.  It may on Wednesday or doesn't have to at all.  Intraday charts already show the 5 wave move up, so any new high would be believed as a minor adjustment to a previous wave that would allow for the new high.  I recommend you have all newly acquired inventory hedged and to be overly cautious about purchases with basis widening and futures not seemingly wanting to narrow basis. The industry is in turmoil with more working capital at risk than ever. A great deal of that capital is believed under duress, which is why so many anomalies are taking place.   

​Corn:

The WASDE report was not bullish or even nearly.  The carry charge is insufficient, basis is negative and wide, and the bridge payment inadequate to take care of much of anything.  I anticipate significant selling in beans. ​

​

Energy:​

Energy was lower today. I anticipate energy to trade lower. ​​​​​​​​​​​

Bonds:

​The FOMC meeting tomorrow will help to decipher the next most probable move, which is anticipated to be lower.

​

​

​​​​​​ “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.