“Shootin’ The Bull”

by Christopher B Swift

​7/28/2025

Live Cattle:

​Friday's report helped to suggest there is 1 percent less cattle to work with going forward and signs of expansion starting to take place.  The lower placement is believed due to the holding back of heifers.  I think this adds some credibility to the thought process that the number of animals is not changing as rapidly as are the number of animals available to the open market. Elasticity of price continues to be spongy with small percentage changes in supply/demand causing large changes in price. I believe this a reflection of too much production and processing capacity for the number of animals available.  Not much appears to have changed though with the knowledge of the report.  Cattle feeders were subjected today to a higher feeder cattle price over fat cattle, leading to further aspects of the market having to go higher to return input costs. 

​

A comment made this morning struck a chord. That being, the low to negative margins on beef processing and narrow profit margin to retail outlets of grocer's and restaurants, opens the door to promote pork, poultry, and any other meat proteins over beef. While the cattle industry remains solely focused on cattle prices, protectionism of borders to keep prices high, and this rally making some scads of money; the higher cattle prices are a detriment to consumers, processors, grocer's and every mom and pop or chain restaurant. As stating the obvious has no bearing on a price moving higher or lower, the comment of finding more profit margin, outside of beef, is something to pay close attention to.  A lot of brazen comments have been made about how everyone should appreciate the hard work of cattlemen and not complain about price tends to fall on deaf ears when consumers are choosing proteins from a price perspective. 

In no way am I against the cattle market when making the comments I do on aspects that have potential to cause adverse price fluctuation.  I attempt to see things from outside the industry that may cause prices to be adversely impacted.  Whether they make an impact or not is always up to the market.  As well, the industry does not need anyone else telling it that there are no more cattle and the price will go up forever.  Last weeks inventory report suggests the lowest herd size in 50 years and the price has already gone up to adjust for. Most any higher trading from here, via the starting spreads between feeders and fats will suggest further attempts to gain market share over those that may not be able to profit from such a wide spread. This last bit of market share garnered will be interesting to see how it folds into earlier procurement.      

​

Feeder Cattle:

Backgrounders continue with the best of both worlds.  Not only is cash at record levels, but futures traders providing premiums in some cases to market into just can't be beat.  Today's higher trade is believed to have brought the top closer than calling for further extensions.  Although there is no doubt in my mind that traders can push futures higher, technical indicators on most all time tables are reflecting divergence or weakness within this rally.  Lastly, price direction has pretty much just been up since January.  The lower seasonal tendencies this year were not as much tendencies as they were sharp breaks before resuming the up trend.  Nonetheless, there is a weak seasonal tendency that begins this week that should not be ignored.     ​​

​Corn:

​Grains were all lower with a belief corn is resuming a down trend. Beans were able to pull off the lows of the day, but remain in a sideways trading range. 

​

Energy:

​Energy was higher with crude leading the way. Both products were higher as well. Friday's close had the price of crude hugging the bottom up trend line of a triangle formation.  This gave reason to begin to doubt my analysis of higher energy.  The inability to push lower, and extent of today's high suggests the breakout is coming to the upside. A trade of October crude above $66.33 would suggest the start of a move to the upside.  I recommend topping off farm tanks and booking fall harvest needs of diesel fuel.  This is a sales solicitation.  

​

Bonds:

Bonds were lower as stagflation remains.  Stagflation remains very apparent and with any movement higher in energy prices, inflation would be expected to spike, causing bonds to trade lower, if not sharply lower. State and local taxes continue to increase as well.  That is inflation with no recourse.  You can stop buying property or anything else, but you still have to pay taxes on what is yours and a lot more for things that aren't yours to support others. The older I get, the more I find out that I own nothing.  I have simply paid the principal for the item, but must pay the annual, quarterly, monthly, or as used tax on everything. I don't know of any government report that reflects these costs to the consumer. 

​

 “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.