Shootin' the Bull about continuing to state the obvious.
“Shootin’ The Bull”
by Christopher B. Swift
6/10/2025
Live Cattle:
There remains little to discuss. The continuance of bidding incoming inventory higher, and future prospects of profit declining, via October futures, is believed evidence of vertical integration. It does not matter what financial position you are in, under a contractual agreement, it is met or contracts are broken and you are no longer in a vertically integrated supply chain.
Cattle feeders remain reliant upon an ever increasing price for fats. Due to the continual bidding higher of incoming inventory, and no futures market for which to layoff risk without a $13.00 to $20.00 haircut off the top, the amount of unmanageable risk is severe. Although today's spread between starting feeder and finished October fat is not "the" widest starting spread for the October contract, it is within $1.00 of the second widest spread.
Feeder Cattle:
Backgrounders continue to enjoy the benefit of futures traders providing them with premiums or even basis trades into the future. You can already see the situation the cattle feeder is in. As stating the obvious does not make the price move higher or lower, it does offer you insight as to what cattle feeders may have to do next. One of those is to maintain the simple belief consumers won't balk at the price of beef. The other is not placing cattle at these projected breakevens.
Corn:
Corn and beans were able to claw back losses from earlier in the day. Wheat remained lower, but has produced a chart pattern that is deemed bullish until, or unless new contract lows are made. I continue to recommend buying November '26 soybeans with a sell stop to exit only at $10.24. This is a sales solicitation. I recommend buying December '25 or March '26 Chicago wheat with a sell stop at $5.50 December and $5.70 March. This is a sales solicitation. While corn may continue to be a drag, the lower acres planted of beans, and world issues with wheat, leads me to anticipate them leading any rally that may materialize.
Energy:
Energy was higher and made another new high this week and from contract low. However, by days end traders pushed crude and the products down on they day. I believe energy prices have reversed with expectations of them trading higher.
Bonds:
Bonds were a tad higher and notes less than a tad. Stagnation in bonds, to go along with the stagflation of the economy is expected more than a higher or lower price move.
“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.