Live Cattle: I heard it through the grapevine that some cattle feeders are marketing Bison sized cattle. Another abnormality that is expected to return to some form of normalcy. I believe a large source of these animals are from farmer/feeder operations that have held what they had instead of rotating inventory, like cattlemen tend to do. This may not be a large swath of inventory, but with the markets head down, news of more weight and maybe a more "have to" marketing need, it may increase the negativity until they can be processed. What we don't know is how many unreportable cattle on feed does the farmer/feeder have? Packers are not anticipated to be in any hurry to narrow newly acquired margins. Especially with poor beef performance and the holiday buying of, pretty much over with. Consumers appear unwilling, or unable to increase willingness to pay or consumption levels. Regardless of cattle or beef fundamentals, or chart technical analysis, the market is fixated on government influence for which has produced a significant number of unknown factors that may or may not soon be known.
Feeder Cattle: If the above has any truth that farmer/feeders are very un-current in marketing's, and lenders on edge dealing with potentially hundreds of dollars of losses projected from cattle already on feed, and cattle feeders still having to inhale negative margins when placing cattle, it will be difficult to resume the previous buying frenzy. Another opinion, would be that were farmer/feeders to lose money on having feed cattle their own corn, I would not anticipate them coming back to the sale barns in droves for another round. Grains topped in 2022 with more production and lower prices since. Cattle are believed topping in 2025 with more production, whether domestic or imported, and lower prices anticipated.
I continue to believe that the retracement levels on the index are of significance. Therefore, as, or if, futures trade over or under those price levels designated per respective contract month, use those opportunities to adjust positions with expectations of the futures settling somewhere between the two prices of the January and March contracts.
Corn: Bulls made some headway in beans and corn today. Wheat lagged behind. I have no idea why the strength in corn or beans, simply due to what appears to be burdensome supplies and even more coming from around the world. I am looking for what may be the termination of a wave 2 with intentions of buying wheat.
Energy: Energy was mixed today. Diesel fuel was weak, with crude and gasoline just plus on the day. With some of the drama believed over in the diesel fuel, it leads me to anticipate the resumption of a down trend in crude oil.
Bonds: Bonds were soft today. The desires of stimulation suggest inflation and reopening of the government a large payout to those who have been impacted, so they can resume life. Along with taxes, services and insurance premium increases, core inflation remains elevated, but still stagnate. A resumption of the inflation, even if just a short bout, would lead me to anticipate a quick drop in bond prices. That drop in price and rise of rate may help to bring in some foreign buying of US debt. Through my 35 year career, and 6 different administrations, increasing the national debt has been the longest trade ever, with the only end insight of, practicing austerity, bankrupt, or war, and no one in government has ever heard of the word austerity.
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.
