Shootin' the Bull about a lot of volatility in outside markets

“Shootin’ The Bull”

by Christopher B Swift

1/14/2026

Live Cattle:

Futures traders are showing more reserve today.  The friendly basis to April was believed almost too good to pass up by those who know how quickly the best laid plans can unravel. As well, some of those cattle placed may have had the opportunity to be placed at a lower price that was made in November.  Therefore, significant profit margins could be at stake.  Today's price action is believed to have reflected the completion of a minor wave sequence.  What we don't know is whether it topped this rally or there is further to go.  With the past two days having recommended doing something, a wait and see approach is what I'll take next.  What we do know is basis is negative by a margin that is believed advantageous and futures traders remain overly reluctant to increase their presence in the futures market, as reflected by the open interest.  

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Of concern is outside markets.  Significant saber rattling with Iran is believed a large percentage of the rise in energy prices.  Metals continue to soar as they are believed a flight to quality, and even bonds broke out to the upside in what may be a similar aspect to metals, a flight to quality.  All US actions, that impact oil, will impact Russia and China, as they are the main benefactor of Venezuelan and Iranian oil.  Russia has a lot of its own oil, but heavy crude needing more refinement, and China has very little oil reserves and burns through tons a day.  So, disruption to China may poke the dragon a little. Lastly, Brazil is swimming in beef. Mexico restructured their import quotas with Brazil.  While only my guess, but most likely to not have to compete as heavily with newly formed cattle/beef production domestically.   

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Feeder Cattle:

Futures traders wanted a little more distance from the index today, even with the index higher. I think pick's and shovels are close at hand were something to dislodge cattlemen from wanting to bid themselves deeper in the red.  I saw metric's this morning of significantly higher volume of sales these first two weeks of January over last year.  Those marketing are making out like bandits and those buying, well, we all have pencils and calculators. With this increase in volume, one has to consider first quarter placements potentially being higher. As above, I have no idea if this is "the" top or "a" top, but a top for the moment at least.  There is so much price expanse that it would take a significant decline to help confirm at top is in.  Therefore, while at the top of the known price range, a not so friendly positive basis, and all of the above to take into consideration, this price area is perceived as advantageous towards managing the increasing inherent risk cattlemen have recently subjected themselves to. 

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​Corn:

Grain and oilseed trading was ho hum after the report this week.  The two bullish factors needed are demand or a shortened supply.  Demand appears stable without an increase in ethanol mandate.  I don't foresee any car manufacture rushing to modify engines to burn a higher ethanol blend and livestock production is not expected to rise enough to eat into supplies.  Export demand will help, but we need a lot and South America is on the forefront of exports. A cut in supplies will need to be from a massive reduction in acres, or a ground breaking drought in the spring to inhibit germination, or heavy rains during pollination. Regardless of what it may be, something has to change from the current status to cause grains to move higher. 

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Energy:​

Energy soared higher again today. Geopolitical saber rattling with Iran is believed the reason for the reversal of the down trend.  Since this may only be a short term factor, I am hesitant to book fuel yet.  Were some calming to transpire, I would anticipate energy to move sharply lower.  For the time being, until a few issues are worked through in Venezuela and now potentially Iran, oil is expected to be very volatile.  Just to let you know I am human, as I finished the above statement on energy, it collapsed $2.59 in 7 minutes.  I know how strong willed cattlemen are, but this time frame is believed one where wills get broken. Do not take lightly the extensive percentage movement of metals and energies.  These price moves are as likely to take place in cattle as any other market, and if does so in quick fashion, you may find yourself having to buy insurance or make marketing decisions in the middle of the storm.  I showed the one minute chart under the February crude oil chart to show how abruptly market action can change.  Considering this, think about a line in the sand.  A price point in which you are going to market cattle whether you want to or not.  As well, you are attempting to avoid the potential of something similar taking place in cattle for which a sharply lower, or limit down open would then place backgrounders deep into a tiger trap when transactions can take place. 

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Bonds:

Bonds broke out to the upside.  Flight to quality is believed the reason, as is for the stupendous rally in gold and silver. Volatility and price expanse are immense at the moment in other markets and the one you are most interested in is at the top of it's historic price range.  

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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.