Copyright Barchart
“Shootin’ The Bull” by Christopher B Swift 11/12/2025 Live Cattle: The extent of volatility, and significant unknown factors of importation of beef and or cattle, has produced an exodus of traders from the arena. Therefore, volatility and price expanse is expected to continue to be violent and wide. With a belief it will be more than difficult to push an even higher retail beef price on to the consumer, it suggests that margins will shrink within the sectors of the industry. Cattle feeders are urged to consider that hedging at present may be simply to preserve working capital. There were few profit opportunities afforded, if any, by fat cattle futures at the levels being paid for incoming feeder cattle. So, I have to believe that a great deal of the cattle feeding industry is in a serious financial bind for which decisions may have to be made towards preserving capital, more so than attempting profitability. Attempting to be profitable on feeding cattle that cost more then what fats are brining today when placed is a significant hole to work out of. Not to say it can't or won't, just difficult. Long story short, regardless of how few of cattle on hand, or even shorter in '26 due to expansion, without an ever increasing price for fat cattle and beef, dramatic shifts in marketing's, production and inputs are going to have to be made. Feeder Cattle: The cattle feeder is not anticipated to be willing to assume negative margins at previous rates. The price of feeder cattle remains excessively high in comparison to fat futures and what may come down the road. In my opinion alone, the only hope for a return to contract high or higher, would be if the consumer were to become more willing to pay an even higher price, and increase consumption levels. I don't think either will take place, and with the belief of severe financial strife in the cattle feeding sectors, it is even less likely. So, as above, consider what may have to be done, over what may be desired. What has to be done is preservation of working capital in an exceptionally volatile market environment. Via the retracement levels of the Feeder Cattle Index, I have shown the areas taken from the index and applied the range to the January and March contracts as to where I anticipate the index to be in those contract month time frames. Corn: Bulls continue to climb the wall of worry. Most slipped back overnight, but at the open, the bulls ascended to a new high in beans and back at the top of corn and wheat. Wheat continues to have my undivided attention. I anticipate wheat to trade higher and looking for confirmation of the termination of the wave 2. I have no idea why corn, bean, and wheat futures are rallying with no new sales, not much hope of new sales, and supplies that are considered burdensome in corn. Energy: Sharply lower today in what may be a reversal. This rally has been all diesel fuel with gasoline tagging along. Crude has remained the red headed step child and today was sent packing. New lows from the October 24 high today suggests the down trend is resuming. Keep this on the front burner. I continue to see the stagflation further divide what is perceived a forming two tier economy, that may well lead into recession. Bonds: Bonds were soft overnight and firm into the day, but very little to write home about. Keeping the economy moving at the same pace, with less money at the bottom, is difficult and may not be able to be sustained. My belief is that those at the top end of the spending range are doing so to an extent it masks the lesser spending by the multitudes. Any reduction of spending by the upper tier would be anticipated to cause significant disruptions in the economy. With multiple warnings already having been relayed about the current AI bubble, and only a hand full of companies stocks producing the lions share of gains in equity indices, a sharply lower equities market at any given time will not surprise me any more than the break lower in cattle. “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.
