“Shootin’ The Bull”
by Christopher B Swift
1/30/2026
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.
In my opinion, the inventory report showed us pretty much what was expected. That being, liquidation has been halted with fledgling signs of expansion. With this quarter anticipated to be the lowest production numbers for the year, it suggests cattlemen will continue to pay top dollar today, and market into discounts in the future. Getting ahead of the curve will be important. The increase of marketed stocker and feeder cattle inventories this month suggests the June fat cattle contract to be in jeopardy of a larger number of placements than last year. As well, those lighter weight cattle will come back to the market in late spring and summer with prices paid the highest ever in some categories and deepening discounts into the future. Basis shored up immensely this week with fats moving into a negative basis for a little while and narrowing the back end. Feeder cattle saw the largest narrowing of the basis spread. By Friday's close though, basis widened back out with the index higher and futures sharply lower. This will make for a lot of room for error regardless of Monday's opening.
Of the most interest is the 5 wave move up that didn't exceed contract highs in most all but the furthest back-end contract months. Along with the CME FC index having made what appears to be a 5 wave move up from the November low, and futures as well, it leads me to believe a top is much closer than further follow through. This would fit in line with expectations that events of 2025 will be difficult to replicate. Therefore, in the return to normality, lower profit margins would be anticipated, along with a contracting price range for which the widest point has already been made and this rally the second portion of. This leads me to anticipate the next most probable move to be a decline that may or may not exceed the November low. Lastly, I think it possible, if not probable, that this week's highs are the contract highs for the year. Hence contract months like November and January '27 may have put their contract high in. This would not be an abnormal event. Of the most interest would be that if the October '26 high stands, it will help add credibility to the thought that markets don't always top or bottom at the highest or lowest point of inventories.
Cattlemen are faced with the same factors impacting consumers, inflation. Whether core or commodity, the consumer is being inundated with higher costs of everything. The lower commodity inflation may have helped, but with crude trading over $65.00 per barrel again, and diesel fuel a $.60 rally in just 6 weeks, is a lot of increased energy inflation that will be both core and commodity. Utility bills, and anything transported, will have a higher cost associated with it. The consumer will feel it directly at the pumps. Precious metals took the crown for the most volatility and price expanse. Short positions were blown out left and right through the week, and on Friday, long positions were blown out like a candle with a leaf blower. Bonds ended lower on the week as inflation continues and the President wants more inflation, and the printing of more money, because that is what the stock market eats and he does not want to see it go hungry. About this time last year, I thought to myself that the wheels were turning awfully fast and could fly off at any time. Today, I am astonished that the wheels have stayed on this long, but the squeak continues and I detect a wobble.
“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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