“Shootin’ The Bull”
by Christopher B Swift
1/29/2026
Live Cattle:
I'm looking forward to CattleCon being in Nashville this year, seeing friends, and meeting new ones. Although I won't have a booth there, I will be present on Tuesday, February 3rd for the day. If you have a moment during the day, send me a text as to where you are in the show and I'll find you. If you would like to set up a time now, please do so and we will find a place to talk. My cell phone number is 615-828-5891.
Today, we added commodity inflation to the mix of a severely weakening US dollar, soaring precious metals, due to eroding confidence in the US dollar, and core inflation still rising, albeit at a lesser rate. Crude broke above $66.00 per barrel this morning. Energy prices directly impact consumers in both heating and transportation usages. As there is only one factor bullish cattle, that being the supply of, and every other factor of demand for beef appears to be competing heavily for the consumers discretionary funds, cattlemen are urged to consider these factors while basis is extremely friendly and there won't be much, if any further declines in the cow herd. If anything, I anticipate a minor surprise in Friday's semi-annual inventory report of about a 1% increase in the cow herd. There is a multitude of other factors that appear negative. What is bullish cattle? The supply is short and there are producers that still want to be in the cattle business. Cattlemen buy cattle. The world consumes beef.
Feeder Cattle:
Futures traders continue to benefit backgrounders. Forget this spring, and consider how you will traverse this fall when more cattle have begun to be in production, and no telling what shape the economy, or consumers will be in under current administrative agenda. There is little more to discuss. If you are going to manage your risk, this is the basis spread and closest proximity to the known high is here.
A fence options spread will produce a higher minimum sale floor than a long put option, and allow for a predetermined price level to be achieved, if materializes. Only a futures contract will produce the highest minimum sale floor at entry, but that will not allow for any further price advancement or potential narrowing of basis. A problem with this spread has been, and will continue to be, hindsight. That capability to see where you could have done better. With last year providing some extraordinary events, I am unsure this year will be able to find new issues as severe as last year. So, with the ability to fix a price at or near current cash, deep into the future, with leeway up to, or above current historical price, the only problem you will have, if you execute this trade, is seeing what you may or may not have missed out on above the short call strike price. I recommend you consider what could be lost, for any reason, and what could be gained, above current historical price, to help you make a decision that may not have you marketing at the highs, but won't have you marketing at the lows.
Corn:
Beans were a little cheaper and corn a tad higher. The grains are dormant and believed only reacting to energy prices. Producers may well be caught up in their marketing's or just not going to fool with it, to see if higher prices materialize.
Energy:
Energy is sharply higher again today. March diesel fuel exceeded the highs made from contract low and is approximately $.13 from contract high. Crude and gasoline will not be left out, but they are just now reaching or have exceeded the June high when the US bombed Iran's nuclear bases. For the moment, it doesn't matter whether it is saber rattling or heating needs, energy is soaring higher and that will be a direct impact on consumers discretionary spending.
Bonds:
Bonds are a few tics higher. I anticipate bonds to trade lower as core inflation has a side kick, commodity inflation. Although the metals have been moving up dramatically, these prices don't impact consumer spending. The price of energy, grains, oilseeds and meat proteins are all a direct or indirect impact on consumers. So, begs the question again, does cattle/beef rise with inflation, or does the inflation hinder the consumer to a point in which how discretionary funds are spent impacts beef consumption.
“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.
/Qualcomm%2C%20Inc_%20logo%20on%20phone-by%20viewimage%20via%20Shutterstock.jpg)
/Advanced%20Micro%20Devices%20Inc_%20logo%20on%20phone%20and%20website-by%20T_Schneider%20via%20Shutterstock.jpg)
/Chipset%20held%20over%20rush%20hour%20traffic%20by%20Jae%20Young%20Ju%20via%20iStock.jpg)