Live Cattle: Futures traders were able to claw back some of Wednesday's lower trade. The $15.00 window of June futures has been thoroughly tested, and multiple times since the start of the year. No doubt, today's higher price action, in the face of overwhelming inflation concerns and lower equities, is impressive. With the price action of Wednesday and Thursday, it leads to; a trade above Wednesday's high would lead to a test of the February high or at least an attempt, and a trade under Thursday's low, a resumption of the seasonal tendency lower. All in the same breath that; at any time, the next headline news article could push futures sharply higher or lower, as recently witnessed the past several days, with today at 4:11pm as example.
Feeder Cattle: As above, an impressive move higher in the face of mounting inflationary pressures. Wednesday's high doesn't appear difficult to take out at today's close. I think the bigger hurdle will be the high of March 5th, but with basis positive, that would still be under current index high. Regardless of whether higher or lower in price, the risks being assumed to produce a pound of beef are immense.
Corn: One of the older books I have in my office is "How to make money trading Commodities", by Dr. Bruce Gould. In it, the methodology of supply and demand was represented by the chart patterns. One pattern was the most basic of supply and demand, a long sideways time frame in a narrow price range. These can tend to last for years, as shown in the chart below of the December '26 corn. This year's new crop corn contract fits the narrative as well as any commodity I've seen in a long time. Whether higher or lower, there are some extenuating circumstances with this year's crop. So, for farmers, I recommend holding off on any new crop sales until prices start trading back into the range they broke out from. With the most recent consolidation, taking place just above the horizontal trend line, I anticipate a breakout to the upside. I recommend buying call options in the December contract to either buy back some presold bushels or simply be long corn through this year's challenges. Cattle feeders are urged to buy the December of '26 and out to May and or July '27 corn calls in case there are production problems or energy issues persist or worsen. Considering what is being paid for cattle and risks assumed, booking an input need has been beneficial so far.
Energy: Energy prices continue to push higher. The President continues to attempt to influence prices with verbiage that Algorithmic programs are looking for. Unfortunately, in my opinion, and supported by Terry Duffy's comments earlier, this tends to teeter on eroding the credibility of the market. More than that, decisions made under the duress of price fluctuation these moves can produce, for which have large percentage gains or losses, can have long term ramifications when attempting to secure the input's you must have. It causes premiums to be charged on all wholesale commodity products to help mitigate the risks of these wide price fluctuations. All energies were higher on the day. At 4:11pm, within the first two minutes after the Trump tweet, crude dropped $4.88 and then right back up $4.46 in the next 12 minutes. Seemingly, all commodity markets appear to be somewhat or influenced by the fluctuation of energy, with some experiencing like or opposite price movements as energy. The current events are producing extreme price fluctuations for which the President wants to reverse as soon as the war is over. However, we don't know when that will be, or what the extent of intended and unintended consequences of this military action will be.
Bonds: Lower as inflation continues to rise.
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.
