“Shootin’ The Bull”
by Christopher B Swift
2/02/2026
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.
Futures came back from what was lost last week, and may be a tad more in the front month contracts. With the on feed and inventory reports behind us, and them telling us what we already knew, there isn't a great deal to anticipate, but something from out of the blue, to change prices by much. Hence, even if prices don't move lower, they are not expected to move higher either without some surge in box beef prices. A very unfortunate aspect could materialize; nothing take place. Yes, with projected margins deep in the red for both packers and cattlemen, if prices don't move higher, or lower, both could find themselves in a bind of no price fluctuation.
Feeder Cattle:
Movement of inventory in the southeast will remain inhibited for another week or two. The storms impact on humans has been taxing, but not so much on livestock. It is more the inability to move with a lot of roads merely chainsaw paths cut through them. Futures traders were quick to shore up basis with only fractions of percent changes in inventory and the index higher. The tiger trap remains in the back months, but has narrowed some today. The index higher is keeping the basis width wide. I continue to anticipate the curve to be an issue going forward. Cattle being paid top dollar for today are discounted heavily into the future. This is a double edged sword in that cattle feeders can use the discount, detrimental to backgrounders, to purchase inventory $14.25 less in May than today. If using a fence options spread, you can produce a lower purchase price and still produce another $20.00 lower before no further lower price could be obtained. This basis spread is seemingly a little beneficial to cattle feeders, who anticipate no declines of the index, and a little detrimental towards backgrounders, who are attempting to hold together historical amounts of working capital. For the moment, cattlemen have a narrower basis to work with, fewer bullish or bearish supply items to converse over, and the largest amount of working capital to produce a pound of beef ever. Stagnation of price is believed the worst case scenario as it won't detract buyers from entering into deep negative margins, and won't return any input costs without a sharply higher price. As well, it leaves the packer bleeding profusely and the consumer no breaks at all in menu or grocery shelf prices.
Corn:
All were lower with as much gloom and doom for grain prices as I've ever seen. Trying to find a bullish outcome to grain prices this year is just asking analyst to lie. There is none in foresight and therefore, something out of the blue would need to transpire before a bull market in grains were to return. Agriculture has found itself on opposite ends of the spectrum between row crops and livestock. Keep this in mind as I stated above that something out of the blue would need to take place to possibly change cattle prices as well. So, with one at the high end of the price spectrum and the other at the low, it would not surprise me to see the President wave his wand around the top hat, tap it twice, and try to pull a rabbit out.
Energy:
Sharply lower energy prices were seen today as de-escalation with Iran appears front and center. Having closed on their highs for the week on Friday, today's gap lower opening and sharply lower trade made for a lot of long liquidation. It will be interesting to see if any follow through is made tomorrow. Since this is the first movement lower, it may take a few days to see if this was the top or just a top.
Bonds:
Bonds were lower today. The volatility, in a very narrow price range, has created some confusion in my analysis. I continue to anticipate lower trading in bonds, but they are taking their time selling off.
“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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