Shootin' the Bull about direct and indirect impacts on consumers

“Shootin’ The Bull”

by Christopher B Swift

3/02/2026

Live Cattle:

Higher fuel prices are expected to be a direct impact on consumers discretionary spending habits.  Whether gasoline, for their personal transportation, or diesel fuel, needed to move every item of necessity, consumers are now having to deal with commodity inflation. 

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Futures trader widened basis further at the opening, but the width most likely caused some to cover shorts or attempt to procure inventory at the discounted price, causing about a $1.00 closure of.  These spreads make for some long rows to hoe going forward in managing not only price risk, but the extensive basis risks.  There are ways and means of doing such, you just have to make some difficult decisions about what you are able to live with and live without. 

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Feeder Cattle:

​The volume of cattle transferring hands the past two weeks has been huge.  New owners are faced with an exceptionally wide basis and cattle feeders with a new projected loss of over $548.00.  With spring approaching, and cattle tending to be moved around for grazing, the cost of is potentially going to be more expensive.  I think backgrounders have worked themselves into a similar situation as cattle feeders with the rotation of new inventory significantly increasing the average price needed to break even.  Futures traders were of little help. I believe the lions share of today's rally was simply short covering of those that sold Thursday and Friday.  The increase of open interest suggested a few more shorts hung around to see what the weekend would bring.  The new longs remain hung, but did get some relief by the close, if they stayed in on the lower opening.  I continue to anticipate the current situation in the middle east to produce a firm trade in energy, directly impacting consumers discretionary spending habits, which is expected to indirectly impact beef sales.  

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​Corn:

​Corn didn't appreciate by much at all on the opening.  Gasoline is anticipated to move higher with diesel fuel, but not the leader.  Therefore, not expected to impact ethanol or corn.  Bean oil though appreciated greatly from this and made new contract highs, because it makes bio-diesel fuel and that is what it takes to run a military operation the scale of what has been taking place. Beans reacted positively, but faded at the close.  This is similar to the energy where crude was higher, but diesel sharply higher.  Since there are a lot of beans, bean prices may not go up by that much more.  Bean oil may continue higher as any stagnation of output would be considered bullish.

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If you are a farmer, and have yet to book your first bushels, I recommend getting busy today.  If you are a cattle feeder, I continue to recommend the ownership of the at the money, or slightly out of the money July call options on corn.  This is a sales solicitation. Both sides are anticipated to benefit from these recommendations as a higher price would allow for a higher average of sales to the farmer and benefit cattle feeders that protected feed costs.  A trade lower and the farmer will have booked a percentage at the highest price possible and cattle feeders pay a lower price for corn, but a tad bit more, to the tune of what the premium of the option costs. Of one thing I don't anticipated is for corn to still be at this same price four weeks from now, whether higher or lower. 

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Energy:​

​About $.30 higher in diesel, $4.00 plus in crude, and gasoline bringing up the rear at up $.08, starts everyone's week paying more for everything that energy impacts. Farmers will be impacted the most with both fuel and fertilizer prices increases by the current events. Every trucking firm, railroad and airline will be raising prices to adjust for the higher fuel costs.  A benefit to the Presidents desire for a lower rate of inflation has hit a snag until a resolve is seen.  Core inflation will be impacted by commodity inflation and consumers will be expected to see many items rise in price, simply because it costs more to get them to the store or delivered to your house.  Fuel prices have been going down and a help to core inflation.  I anticipate at least a short term reversal of this as the conflict has just gotten started and is expected to increase commodity inflation. 

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Bonds:

​Bonds were sharply lower, but not before making a new contract high.  I am not as sure why bonds sold off, but potentially to make the new debt issues this week be a little more attractive.  Equities were able to shake off a lower start and the US dollar has soared.  For the moment, who wouldn't want to own a piece of America!  ​

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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.

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