“Shootin’ The Bull”TM

by Christopher B Swift

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September 1, 2026

 

Thank you for subscribing to "Shootin' the Bull."  Navigating the immense price fluctuation and volatility has never been more important with the amount of working capital at stake.  We consume as much information as possible, from all sources available, decipher it, and relay our findings to help you make the most informed decision possible.  

 

Live Cattle:

Traders continue to consolidate futures.  The trend remains down, and cattle feeders are stuck between a rock and a hard place.  Cattle feeders need to place inventory, but currently reeling from extensive losses.  This situation will take months to sort out. I am in as much expectation of a rally towards the $220.00 level October as I am a decline to $202.00.  In this decline, many of the corrective moves higher have made the high of that correction on the first move up, then consolidated before moving lower.  A trade above $214.22 October would break this pattern, and a trade under $209.52 would keep it intact. 

 

For the moment, I believe cattle trading has taken a back seat to the extensive increase of inflation, primarily caused by higher energy costs. This leads me to believe the consumer is going to be impacted further, leaving them to stretch discretionary spending further.  Similar to how the seasonal aspects worked their way through the bull market, the bear market could be the same.  That being, currently going into a stronger seasonal time frame, price may not reflect as strong a move, or could simply trade sideways. Even though cattle feeders are believed needing to place cattle, I think they are still chocked full of long fed inventory.  All of the above leads me to anticipate further volatility, in a very wide price expanse.  

 

Feeder Cattle:

Cattle feeders may have a need to fill empty pen space, but maybe not the desire.  Again, staggering losses have begun to be realized, keeping cattle feeders from raising their hand too high at the sale barns.  I think this works the same way through the lower weight classes.  What I hear more than anything is heifer retention, a great need to rebuild the herd, and more subsidies to help promote such, on their way.  I think this may be too little, too late. Free markets, in this case, have not produced the incentive to expand.  What the higher price did do, is incentivize others to attempt to capture the large profit margins cattlemen have been making.  Cattlemen didn't respond to their own industry signals, and is believed to have allowed for the encroachment of imported beef, further expansion of the beef/dairy cross, and beef price that consumers have found a limit on what they will pay.  All of the above is not necessarily bullish or bearish towards cattle prices; it is extremely volatile. You will have to manage extensive capital outlay in a very volatile market environment for months to come.  If just now starting, get busy.  If already started, adjust positions accordingly towards protection against further downside price action while leaving the top side open in case of basis convergence with futures moving higher.      

  

Corn:

Feed costs are soaring and expected to further impact feeder cattle.  Corn has rallied $.88 cent in 15 trading days for a 19% increase of feed costs.  Feeder cattle, on the other hand, have only declined 13% from the top and have taken 2 full months to do so.  This leads me to believe cattle feeders are way behind the 8 ball if not having managed these price movements.  Corn moved higher again today and now approximately $.23 from the wave 3 target. Farmers are urged to consider marketing a portion of their crop if the upside target in corn is neared.  Cattle feeders had been urged to fix input costs. What to do now is a different story.  What to do now is stop further price advance against your needs.  I am fully aware of "having" to do something now will place you at as much risk of the price moving lower, as higher.  So, an at the money long call option will produce a 50% Delta at the onset and 100% if purchase 2.  This halts further adverse price fluctuation on the input needed and leaves the downside open were prices to fall.  At the moment, drought and war are the two factors moving the grain and oilseed markets.  I don't expect either to subside. Beans made a new contract high, KC wheat made a new contract high and bean oil is knocking on the door of the down trend line that forms the wedge.   

  

Energy - Bonds:

New contract high in diesel fuel and gasoline.  Crude remains less than a dollar from its contract high.  Diesel is now testing the March high.  Once above this, there is little to halt the advance. The price advance, decreasing supplies, increasing demand, and an escalation of military actions, is expected to weigh heavily on consumers and producers alike. There is nothing bullish towards the consumer, or producers as higher energy impacts consumer discretionary spending, and increases input costs to producers. This situation is not going away anytime soon either.  There is not going to be any increase of refining capacity above what is currently operating.  The military actions may or may not subside anytime soon, and farmers are going to harvest 180 million acres. This commodity environment appears explosive.  

 

Bonds and notes ended lower for the same reasons given the past two months.  That being, inflation is high, the rate of inflation is high, everything to do with taxes and insurance premiums is high, and now commodity inflation at a historical high.