Shootin' the Bull about cattle feeders going backwards.

“Shootin’ The Bull”

by Christopher B Swift

​12/10/2025

Live Cattle:

Cattle feeders appear to have gone backwards today.  Feeder cattle, both cash and futures, were higher than the fat market, and boxes broke to a new low from historical high today.  Deliveries to the December suggest both sides are willing to make and take delivery. The significance of price expanse may have positioned both buyer and seller in a very profitable position. 

February through October fat cattle now have a visible 5th wave new high close on the close only chart.  This leads me to focus on the price action from the low made just before noon today in the attempt to find a top to what is believed a major B wave.  If correct, the next most probable move is anticipated to be a major C wave decline.  With the above statements, and the chart pattern, cattle feeders are believed assuming even more risk than previous, as optimism for higher cattle prices does not appear to be shared by anyone else.   

Feeder Cattle:

Futures traders have been a little more hesitant to converge basis, even with cash seemingly very strong.  At today's close, the 5th wave new high close remains elusive.  I continue to believe the current price environment as one to make sure you have positions on that you wished you would have had on when the initial break lower was made. 

I have recommended this week to market spring inventory with a fence options spread.  This remains valid.  For some, they have chosen to only buy the put option, with a plan to sell calls on what is anticipated to be a 5th wave new high.  As above, I will be focused on the price action from the lows made just prior to noon today.  If prices unfold in a manner that helps to confirm my analysis, I will be looking to sell calls against any position that just has a long put option.  While prices are moving higher for cattle, and not much else, I recommend you use the rally to mitigate or moderate the enormous risks being assumed under a positive basis spread and expectations that seemingly exceed previous highs to profit from.  

​Corn:

Grain and oilseed trading could have been more mundane, but it would have to have struggled to accomplish such.  There are few fundamentals that are bullish grain.  There are some expectations that could be bullish, but I think, like many, it will take a drought, wiping out 25% to 33% of production to reset the grain markets from being bearish.  Since that is not going to take place just yet, the small amount of bridge payment, weak basis, poor carry, and significant supplies lead me anticipate a  lower trade.  Farmers are expected to re-own their crop with futures and or options and lose even more under the impression of a market declines on a slope of hope.  The President's actions are providing hope, but not much more. With 12 month CD's paying around 4% and grain losing money on storage and not gaining value, the 4% may not be a bad way to not be long the corn or soybean market.  

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I believe this bear market will last longer than most anticipate.  I recommend farmers consider owning the at the money puts in new crop '26 corn and beans to provide a minimum sale floor, and then, hope and pray the price soars higher and you lose 100% of the premium you paid for the options.    

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Energy:​

Energy was mostly lower on the day until a oil tanker was seized on the coast of Venezuela by the US today.  It appears the news just made for a good correction off the new lows made prior to the news hitting the wire.  At today's low, January crude was about $.27 from breaking the up trend line.  I anticipate energy to weaken further. 

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Bonds:

A quarter point rate cut, but further shifting of the yield curve with the Fed announcing more short term borrowing than long term to keep rates lower and easier for the government to meet its debt obligations on interest payments.  As has been the case for several years now, any actions taken by the government sends stock indices higher. Today seems no acceptation. An issue with this may be that not all stocks are participating at the same rate as some of the few with more influence. Hence, the index higher may or may not increase the value of one's portfolio if not participating in those few companies. I anticipate bonds to trade lower as lowering short term rates is expected to stimulate inflation further, leading to longer term debt and higher interest rates to come.  This appears as "it's going to get worse, before it gets better" for those that live on Main Street.   ​

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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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