“Shootin’ The Bull”

by Christopher B. Swift

​7/2/2025

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Live Cattle:

Traders have displayed multiple feelings in today's trade with both sides of unchanged having been seen, and a pretty wide price expanse.  The severely discounted fat futures continues to project significant losses when viewed from the aspect of the CME index or this years futures contract months.  At the moment, I believe that another round of garnering market share may be on the cusp.  The continual widening of the spread between feeders and fats is a good indication that some are willing to assume the risks, and they will take market share from those unwilling to.  As there has been little evidence of any contraction in cattle feeding or processing abilities, it is difficult to see much else transpiring.  Today's price action pushed most contract months into Tuesday's gap lower.  With still considerable price expanse to close before new contract highs would be made, the chart pattern remains as having expectations for a lower price.  With an initial move down from contract high, and the recent trading the correction of this initial down move, it leads me to anticipate the next most probable move being to the downside.  

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Feeder Cattle:

Hundreds of thousands of cattle will be marketed over the next 3 weeks starting Monday.  If cattle feeders are going to bid for market share, I have no way of determining what extent a cattle feeder will go to in order to remain in business, or garner market share.  Of one thing that appears obvious is that the amount of capital needed suggests not only is vertical integration being sought, but it is being financed from larger corporations that may or may not be sharing in some of the risks associated with the wide spreads between raw and finished product. Until production and processing can shrink, I can't help but to expect significant volatility.  

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A couple of things go through my mind with the first and foremost that markets tend to be the most bullish at the top. While the top continues to be elusive, attempting to garner more market share while prices are high is a pretty bullish aspect.  Another is the positive basis and extent of in the fat market.  The wider the spread, the more risks a cattle feeder assumes.  As this upcoming time frame may well be an attempt to garner more market share, this factor could be a moot point, but seemingly today's higher price action has spurred the bulls to a level believed "bullet proof".  This leads me to state again that bull and bear markets are the most bullish at the top and bearish at the bottom.  

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​Corn:

All three rallied today with some aspects of a trade deal with Vietnam and a sharply higher energy trade.  I made recommendations today to buy November '26 soybeans with a sell stop to exit only at $10.30.  This is a sales solicitation.  I'm not sure corn has reversed, but may have found a short term bottom that would allow for beans to trade higher.  I recommend soybean farmers to buy the $11.00 and $12.00 November '26 calls.  This is a sales solicitation.  

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Energy:

​Energy was sharply higher with diesel fuel continuing to leading the way.  I anticipate energy to continue to firm at the moment.  ​​​​​​​

Bonds:

​Bonds sold off but no real reason why.  I continue to believe the economy is teetering between recession and potentially higher inflation.  Either way, the stagflation would be broken.  Without the President getting lower rates, that would be intended to spur inflation, energy could produce this with potential transitory expectations due to the inflation being caused by a commodity.  ​​

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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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