Shootin' the Bull about buying and selling at the known top

“Shootin’ The Bull”

End of Day Market Recap

by Christopher B. Swift

​3/24/2025

Live Cattle:

Brand new bets at the top of the market were noted with Friday's large increase in open interest.  New longs entered into a position of taking delivery at the highest price futures contracts have ever made.  New shorts entered into a position of making delivery at the highest price futures contracts have ever made.  Consumers are going to see two weeks of higher beef prices coming as the run up in boxes takes about two weeks to filter into the grocery shelf or major distributor.  The rally in boxes started about two weeks ago and didn't top until Friday of last week. 

Although exceptionally volatile, and a wide price range, most of the day was spent above unchanged, but at the close, the lower trading may be telling the tale.  Cattle feeders have just recently overcome the second highest spread between starting feeder and finished fat.  As this last rally made what looked like an impossible feat to profit from high feeders prices last fall, I can only imagine what the next rally may have to look like to make the most recent cattle purchased show a profit.  Nonetheless, farmer/feeders are on the verge of going back to work.  I saw video's of temporary fencing coming up and know that plowing and planting are on their agenda.  Therefore, sales of fats could increase, as well as less pressure on the feeder market from this group of producers over the next several weeks.  The on feed report was a moot point.  This was the 30 month of over 11 million head on feed and beef production down only 2.4%, with the bulk of that having come from a slower slaughter pace.  Again, manipulation rules the day as every sector is attempting to manipulate weights, time on feed, and slaughter to make margin, as seemingly it is not available at the moment.  Dependence upon an ever increasing cattle price and dependence of consumers to afford an ever increasing beef price is what cattle feeders are relying on to return the most working capital put at risk in history.  ​​

Feeder Cattle:  

 Cattle feeders continue to be the ones viewed in a very vulnerable spot.  They own the highest priced inventory in history at a time when previously high consumer spending is being tested, and government spending being reeled in at every place possible.  The lower placements in February are anticipated to be overshadowed by March's.  As well, those cattle will finish in a time frame noted as the "doldrums of summer".  Backgrounders have lost about all of the negative basis with only a few of the back months premium to the index.  Massive volatility, accompanied with excessive price expanse should be expected for days now as cattle feeders decide on what to pay next for incoming inventory.      

Corn:

​Corn was soft and not much more.  I am anticipating a softening of commodity prices the next several weeks.  Whether dramatic or just not moving higher, but softer nonetheless.  Next Monday will have planting intentions.  With corn at 94 million acres, one has to scratch their head going, why are beans lower and corn higher?  I don't know either.  I expect a bottom to be found in grains sometime over the next couple of weeks and will set my sights on a buying opportunity to continue to fix some variable costs.  ​​

Energy/Bonds:

​Energy has seen both sides of unchanged.  Today's new high, in what is believed a correction of the decline, is believed to be terminating the correction.  I anticipate lower energy trading.  Like the corn, were this to materialize in diesel fuel, it will lead me to lie in wait for an opportunity to top off farm tanks or complete this years planting needs.  Bonds were lower and anticipated to remain lower as inflation in other sectors, than commodities, continues. With the Fed's comments last week of no foreseen rate cut, and retail rates high, consumers continue to battle inflation on other fronts than commodities.  

 “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.