“Shootin’ The Bull”

by Christopher B. Swift

​7/1/2025

​​​​

Live Cattle:

Beef production has risen and stabilized at the higher levels.  Cheaper feed stuffs will continue to produce incentive for cattle feeders to keep putting weight on them.  A problem for the past two years has been the number of cattle.  Although the border wasn't closed until November of last year, the absence of inventory from the market helped to propel prices higher the first half of this year. That inventory is expected to come in at about the same time as summer video sale cattle are to be delivered in September and October.  Hence, consider going forward that the fall of this year has the potential to have heavier placements, with no changes in weight gains, producing more beef into the spring of next year.  Whether a bawling calf, stocker, feeder, fat or beef, all prices are at historical highs.  This week will be abbreviated with few cash sales expected in sale barns.  Hence, with next weeks start to the video sales, and a couple of days to think over the change in narrative in cattle, we won't really know until middle of next week how aggressive cattle feeders will still be.  The exceptionally wide basis presents cattle feeders with tremendous risk, especially when viewing projected losses due to current exceptionally high feeder cattle prices.  Monday produced the widest width between the starting September feeder steer and February fats, and second widest between the index and the December live cattle contract.  So, start from yesterday to see when the most expensive cattle will be finished and what those projected losses could be.  

​​

Feeder Cattle:

Backgrounders may have to wait this week out until cattle feeders have time to reflect their sentiment on the opening of the border.  Were cattle feeders to take step back, and the basis spread not too wide at the moment, the step could be rather large.  Whether this event is a direction changing moment or not, until proven otherwise, I anticipate cattle to have topped.  

​

​Corn:

Corn rebounded from new contract lows this morning.  This allowed beans to get plus on the day and still hasn't exceeded the $10.10 November low yet.  I continue to like owning the '26 November and believe that soybean farmers should own the $11.00 and $12.00 November '26 bean calls to allow for cash marketing's to take place and still be long the market through the call options.  ​

​ 

Energy:

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

Bonds:

​Bonds made a new high from contract low today before selling off.  ​​

​

 “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.