“Shootin’ The Bull”
by Christopher B Swift
2/06/2026
Live Cattle:
In my opinion, there are no words for the price action this week. I can't explain it, nor has anyone been able to explain it to me. The dramatic shifts in basis, cash trading, and futures trading have disrupted some of the best laid plans out there. Although I fully understand the lower slaughter numbers, the bidding higher for lesser inventory simply points to still way too much processing capacity than cattle. I continue to believe the increase of smaller processors, mostly that support farmer/feeder and some commercial processing, is a burr under the saddle of the majors. The Biden era threw billions of dollars into increasing livestock processing. As the cattle numbers dwindled, those smaller plants were able to compete at a level that hampers the majors. With the market as fragile as it is, recognized by the near limit sell off when the announcement of JBS on strike was made, were a second shoe to drop in processing, would be anticipated to back cattle up to a point in which the cattle feeder may have to capitulate. I wrote this week of the polar opposite position the packer and the cattle feeder are in. The packer, bleeding profusely, and the cattle feeder, seemingly dangling a proverbial knife over their heads, leads me to believe the processing side will do more to control what they can. What that may be seems the question. Hearing multiple comments this week on supply issue, and how the supply issue won't change by much in the coming months, seemingly emboldened cattlemen further to resist marketing and decrease the use of risk management, in any form. Knowing that supply has an equal partner, demand, I try much harder to balance the two than all one sided. I believe there are fewer cattle, but I don't believe beef demand is still good. Lower box prices, and fewer boxes moved, suggests consumer demand is not nearly as strong. So, the willingness to pay may still remain, but they are not consuming nearly as much at the elevated price levels. Packers are anticipated to take further action to stem the losses.
Soybeans benefited greatly from the "Trump bump" this week when a mere mention of a good talk with Xi with soybeans mentioned. Corn has not received any benefit from anything and may be due for something. I would say that nothing would please the President more than to see grain prices higher and not have to subsidize the farmer. On the flip side, the cattle industry will be holding their breath as to when or if the President wants to comment on beef. There is no doubt the administration is favorable towards beef, but maybe not its price. Hence, Kennedy was adamant about rebuilding the herd when speaking at the NCBA convention this week. Energy prices continued to move higher as well this week and bonds even perked up as employment seems to be slipping. There was no employment report today and has been postponed until Wednesday of next week. With the ADP report earlier this week, not meeting the expectation, and a downward revision for December, I don't think it was going to be good. With the bond market having moved higher, inflation is anticipated to increase. That is what the President wants as anything that may curtail inflation seems to make equities move lower. Energy prices were higher on the week with tremendous volatility in all of them. This week has been phenomenal trading of everything and I have to believe there have been consequences of these actions that have not been exposed yet. I am overly cautious for more volatility and price expanse next week that may or may not be friendly to all.
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