Shootin' the Bull about end of week reflections

“Shootin’ The Bull”

by Christopher B Swift

1/8/2026

Live Cattle:

Nothing new today with cattle feeders continuing to see feeder cattle prices rise substantially more than fat cattle prices.  I would anticipate some reflection to take place this weekend when volume of sales and prices are tallied.  Futures traders appear less enthused with having to pay the higher price for feeder cattle futures than cattle feeders do feeder cattle.  The issue with this is that with an even or positive basis in the fats, anything that may trigger a sell off would push the basis further in a positive direction, leading cattle feeders to have to market at discounts, if were then deciding to hedge.   

April fats need a close above $237.37 to help complete some of the potential missing waves.  A close under $231.70 April would lead me to anticipate the rally complete with expectations of the C wave decline.  

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Feeder Cattle:

Backgrounders believing the price of feeder cattle would go right back up were right.  As via the index, there is only $8.23 before new highs will be made.  Therefore, now that prices are back at the top, what do you do?  My belief is that just about everybody was in the same boat from April to October in the cattle market.  It was a stupendous trend higher with few hiccups.  From mid-October though, significant price fluctuation has taken place in a very short period of time that leads me to believe cattlemen are spread across the Prairie in varying economic positions.  Coming is believed evidence of equal or higher beef production in the 1st quarter of '26 to '25, more imported beef, further expansion of the beef/dairy cross, maybe some expansion in the beef herd taking place, and always a consumer dealing with rising core inflation and now, barring only a few, commodity deflation.  To offset this potentially will be further government spending, further divide between economic classes, and great hope that if the idea of 10% making up 50% of the spending remains.  Looks like a good tug of war to watch through the 1st quarter. 

Until the actual settle price is seen, it appears off the cuff that the January contract has exceeded the wave 3 high and in wave 5.  No other contract month so far has done so with May about $1.62 from a new high close.  The positive basis is keeping front month futures at a narrower basis than back.  This is believed due to cattlemen extending themselves to an extent for which futures traders may not be as willing.  Front months may have to act quickly to converge, but back months don't and with more time, more beef production, whether domestic or import, is expected. I can't think of much more to comment on until this weekend exposes the volume of sales and how we start the year off in this weeks beef production. 

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​Corn:

There are considerable comparisons to be made between watching paint dry on a cold winters day and corn trading.  One about as exciting as the other. This is expected to end soon.  With moisture coming into corn belt drought areas this week, and still a month or two of winter, subsoil moisture improvements, no expectations of acres cut, and subsidy payments to farmers, suggests supplies won't dwindle in corn anytime soon. Demand is not expected to improve, leading to potentially a break out of this sideways range to the downside.  Beans are believed to be in a down trend.  I have heard more than one analyst speak of the Tariff issue coming before the Supreme Court and how it may impact beans.  I can see that due to the only reason the Tariff's were enacted was to force China to agree to other import/export markets. Beans are believed being used as leverage and were that leverage to dissipate, with the size of the South American crop, beans would be anticipated to trade well under $10.00.  Remember, barring metals and meats, most all other commodities are in a bear market. 

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Energy:​

​Energy prices are volatile with a huge rally today after new lows in this decline on Wednesday.  I have no idea why the strength today, but there was no let up in the buying through the day.  This doesn't change the analysis or my opinion, but did get my attention.  

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Bonds:

Bonds were lower and anticipated to continue lower.  Core inflation continues to climb and commodity inflation lower, barring a few outliers. I anticipate bonds to continue lower. 

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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.