Live Cattle: The production side of the industry is believed collectively holding their breath in expectations of whatever comes next. Under the circumstances of current events, it makes attempting to foresee an outcome more difficult. Although futures traders provided a little relief from the lows, there seems no quick resolve to the need for sharply higher prices. As feeder cattle prices continued to climb higher in the first two weeks of October '25, and the first two weeks of fed cattle trading in March lower, it leads me to anticipate last weeks loss per head to be significantly higher this week. I recommend maintaining all hedges.
Feeder Cattle: Traders were status quo in the feeder market. New lows in this decline from the February high, and not much of a spark from cattle feeders suggesting they are willing to pay higher. The severity of basis, historical cash prices recently paid, and now something from left field, has impacted cattle feeders and backgrounders best laid plans. Going forward is not expected to be any easier as the long term bull market appears to be in a correction phase and no telling for how long or deep in price it may be. As the first quarter was supposed to be the lowest inventory numbers and cattle on feed for the year, we made it through it if the next two weeks don't reflect some sort of huge loss of inventory. This suggests that going forward, cattle producers will continue to pay top dollar on the front end, as there are still fewer cattle to go around, but marketing into discounts. It appears enough statistics have reflected a turn to suggest liquidation is complete with fledgling signs of expansion. I recommend maintaining all hedges.
Corn: On the mid day cattle comment, I recommended for soybean farmers to buy the $11.50 November soybean put for around $.50. This is a sales solicitation. This produced a minimum sale floor of $11.00 and left the top side wide open for further advancement. The fertilizer situation has the potential to push a few more acres towards beans than corn, with beans already the lions share of acres this year. Corn was not quite as attractive, but still higher on the day and allowing for hedges to be placed there as well. The current event was not anticipated to this extent, or to have produced the rally in corn and beans. Therefore, use what has been offered, that you had no idea was going to be, and still have yourself in a position to profit further from potential upside price movement. How do you wish your disappointment to be; that you gave up $.50 of no telling how large of a rally, or that you saved $.50 and sold beans under $11.00?
Energy: The military has produced an enormous draw on diesel fuel. Refineries are not anticipated to be able to keep up with need, therefore, it won't matter how much of the SPR you release if you don't increase refining capacity. At the start of April, diesel fuel needs increase significantly due to planting 180 plus million acres that may have to be gone over more than once. Hence, I believe it possible that there could be a squeeze on the April and May futures contract in diesel fuel for which great demand from farmers and the military will meet head on. Availability is now starting to be questioned as rural energy CO-OP's tend to not do much in front of anything and little storage. The current event is believed pulling hard on fuel and those willing to pay up for it will get it first. Diesel fuel traded over $4.00 again today. As I write this it is off the high, but still up $.23 on the day.
If you happen to own or have oil rights leases and this price increase of oil is beneficial to you, even at the discounts, you can lock in a higher price, with a put option, than has been available to you for the past 12 months. Hence, here is an opportunity to lock in near contract highs out to December of this year in your oil production.
Bonds: Bonds are lower because inflation is sharply higher.
Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "Mid Day Cattle Comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com
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.
