Shootin' The Bull
"Shootin' The Bull" is a daily futures and commodity market commentary, written by Chris Swift, commodities broker and founder of Swift Trading Company in Nashville, Tennessee.
With over 30 years of experience in the commodity futures industry, Chris's technical and fundamental analysis is provided for his clients and readers in an attempt to make a more informed trading decision.
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“Shootin’ The Bull”
Commodity Market Comments
by Christopher B. Swift
Not much has changed in the cattle world as of lately. Futures traders appear skeptical to push them much higher, now that basis has narrowed. Next weeks on feed report will be watched closely for a trend developing. The past three have shown higher placements, lower marketing's, and increased numbers on feed. I know demand is good. In some cases excellent. Therefore, this leaves little room for improvement. Heavier carcass weights remain with this believed as the cause for fewer marketing's. I continue to believe the consumer holds the reins to the next most probable price move. With supply believed stable, demand is about all that can change to change price. At present, I don't see either changing abruptly. The chart pattern continues to lead me to anticipate a C wave decline of some fashion. Maybe only down to the $123.00 level, but were demand to slow any, then I could see back under $120.00 for this spring's prices. With recommendations in place, there is little to do but wait to see what the next direction will be. Were a lower trade to materialize, I would look to adjust previously recommended synthetic hedges. Were a higher trade to materialize, then the minimum and maximum sale floors have already been set.
The chart pattern on the feeder cattle is what leads me to anticipate a C wave decline the most. Weather in the north, and full pens in the south, are believed keeping feedyard managers from going "bid" for inventory. The index has wallowed the past couple of weeks. With sales around the country gearing up now, the index will be anticipated to fluctuate in a wider range. Slaughter statistics viewed this week of 2019 versus 2018 showed an increase in cow and heifer slaughter that leads me to anticipate expansion was completed in 2019. While there is little to suggest the industry will continue with this liquidation, or turn it back around to expansion, just dealing with the residual births from expansion suggests supply will remain elevated for another year. Consumer demand holds the key to price movement. If you were to look for anything to move markets, look for any changes that may be impacting consumer discretionary spending.
Hogs were higher today.
And whipsawed like a wet rag today. I completed what I started on Thursday to liquidate long corn positions. The sharply higher trade on Friday wiped out all the losses from Thursday. Although some will have had the forethought ability to have traded this swing, I believe the swing was as big as it was due to nobody knowing exactly what to do. I'll wait for further evidence one way or the other and act as best I know how to that information.
Energy was mixed again today. There is abrupt volatility in several of the commodity markets.
US Treasury Bonds: