“Shootin’ The Bull”

by Christopher B Swift

​8/20/2025

Live Cattle:

Competition won the day over any sort of contraction in production or processing capacity.  As rationing is reaching another tier, it will be anticipated to produce another increase of working capital.  With this in mind, consider that the competition will cause some to overextend themselves, or make rash decisions based upon money and frustration of having missed out on portions of this rally. Expansion of production capabilities in the north, the premium on fats the north carries to the south, the loss of what was once a steady stream of 3% to 5% of yearly inventory to southern cattle feeders, and a great deal of the beef/dairy cross fed in the north, it leads me to expect any contraction to come from the south over the north. To compete at this new tier of rationing is expected to produce significant risk exposure to excessive price fluctuation and volatility.   

Feeder Cattle:

In every weight class, it appears competition is favored over contraction.  After having seen Dr. Peel's chart this morning, cow/calf operations are believed staying the course of selling heifers over retaining them.  Throw on top an abundance of feed stuff's and all of the above leads me to anticipate greater risks being assumed.  At present, that risk can be a plethora of situations, not just supply.  

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Of the most interest today was the recognition of what some will pay, or a assume the risk of, to compete.  OKC west printed a sale of 731# steers at $4.03 or $2,945.93. If fed for 180 days, or longer, to gain 769# to a slaughter weight of 1,500#, and the February board today at $2.3772 or $3,565.80 suggests a needed cost of gain to break even at $.80 per pound. 

$2,945.93 - $3,565.80 = $619.87.  769# / $619.87 = $.80 cost of gain needed to break even.   

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​Corn:

All were firmer.  I recommend buying November of '26 soybeans at $10.58 with a sell stop to exit only at $10.35.  This is a sales solicitation.  ​​

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Energy:​

Crude and gasoline were higher on the day. Diesel has risen a dime in the past three sessions.  Energy is still trading sideways in a fledgling bear trend. 

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Bonds:

Bonds were higher again today.  September still lacks about a point from breaking back out of the triangle to the upside.  Although need may be questionable, there is no doubt the desire to lower rates.   ​​

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 “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.