“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

​3/5/2025

Live Cattle:​

A significant loss of open interest on Tuesday suggests fewer are finding the hyper volatility interesting.  Futures traders did producers a solid by converging basis.  Producers that want to market through futures and options can do so with significantly less risk of basis than just two days ago.  Cash markets are stable and soft while futures continue to attempt to predict whether consumers will fare better or worse in the new administration.  The battle is fierce, to say the least, with the stakes/steaks never higher.  Significant working capital is at risk with winds of change blowing.

​

​​Feeder Cattle:​

Traders are digging holes and filling them back up with exceptional speed, all the while, cash markets appear to be stabilizing, if not softening.  Feeders lost over 1,000 contracts in open interest on Tuesday.  Cattle feeders are believed feeling a need to place more cattle, be damned of the margins or capital outlay to compete. Total reliance upon an ever increasing price seems a difficult manner to profit from.  As traditional manners of calculating profits appears to have changed dramatically with the influx of vertical integration, it is difficult to see how some are making money, or are positioned to. Every traditional manner of calculating profits and losses appear to show negative returns without significant advancement of price for fat cattle.   

​​

​​Class III Milk:​​

​Milk was tad higher today.  The sell off in milk appears correlated with multiple other markets that have decline in price along the same timeline. As the fundamentals of milk have seemingly not changed, yet, prices declining, I will make some decisions sooner than later as to what to do next.  

​​​​​​​​​​​​​​​​​​​​​​​

Corn:  

I recommend buying the July at the money corn calls and buying the December $5.00, $4.80, or any bull call spread of a dollar with a less than $.25 premium.  This is a sales solicitation.

​

​​Energy:​​​​​​

Energy plummeted.  After the President reiterated the "drill baby drill" slogan on Tuesday night, oil took it on the chin.  The build in stocks from the DOE report this morning didn't help either.  Of the benefit though is that farmers and ranchers can top off farm tanks and continue to forward contract spring fuel needs with the fortunate market condition of getting to average down than up.  

​​​​​​​​

Bonds:​​

​Bonds were lower. Inflation remains stubborn.  ​​​​​​

​

​​This is intended to be or is in the nature of a solicitation. An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of the margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.