Live Cattle: A part of the rationing of cattle, to maintain an adequate beef supply, has been to grow cattle bigger and increase imports of lean trimmings. The importation of beef saw huge push back from all in the cattle industry, but was welcomed by all of those that use the lean trimmings, and could use some margin in their production. Last week, it was noted that some are attempting to help out the beef trimming's market, with a second bonus of potentially reducing milk supplies, through a voluntary buyout of older dairy cows. Seemingly, there is a huge push back on this as well from beef cattle producers. I'm not sure any satisfaction can be obtained from beef producers while they have a somewhat stranglehold on the market, simply because they do not want their stranglehold broken. Nonetheless, if this does have any merit, it would lead me to anticipate further divide between cattle and beef prices. As well, with processing now shrinking, any increase in slaughter from dairy, would be anticipated to potentially take a hook from a beef cow. I think something to consider is that the money some are making is enticing enough to have others attempt to participate, and the more participation that takes place, the more likely beef production will increase. Throw on top of this cheaper feed, and the pounds are expected to be there.
Long way around the barn to say that I anticipate beef production to rise, and slaughter rates to vary in attempts to bring back margin. With those anticipated increases not hear just yet, and futures traders willing to move in lock step with cash, both may rise a little further. If, or as they do, I recommend you prepare for a future that may have greater beef production than in 2025.
Feeder Cattle: Cheap feed makes cheap cattle. As above, with negative margins reflecting an over $430.00 loss per head when placed last week, feeding them a long, long time is believed the only way to help return margins. Cattle feeders don't seem to care with starting spreads no better and a lot of empty pen space to fill. Futures traders continue to show reserve with a hefty positive basis. With great expectations of more normality's returning in 2026, I look at the seasonalities, They show a topping in February, with years in the past showing the February high having been the high for the year.
Whether it materializes or not, the May contract could use a new high close to complete a sequence. If it does not, you will have a pick a price that if trades under, you just have to make some decisions in an unfriendly marketing environment. If a new high does materialize, it could do so in a flash or a couple of hard days up that would keep most from wanting to sell into. That is where I recommend you complete the remainder of this years marketing, were a new high to be made.
Cattle feeders are running out of room before creating a new historical high on the index. So, if you are waiting on a return to the top, you are here. Futures though, appear reluctant to share in most cattlemen's enthusiasm. Hence the basis spread.
Corn: Corn plummeted today and is believed starting a bear market. Waves 1 and 2 are complete and wave 3 was pretty much made today. This suggests some sideways trading and then still lower to either equal or exceed current contract low. Soybeans resumed their downtrend today. The agricultural industry of America is weak. That includes cattle as well, simply due to the amount of risk exposure they are currently subjecting themselves to. All of the above leads me to anticipate more government subsides towards farmers and further increases of beef production.
Energy: Energy reversed a lower trade from overnight to close plus on the day. Although they remain in a bear trend, energy is not moving as low as I had anticipated and is currently very volatile. For the time being, I anticipate energy to continue lower. Were the President to produce further stimulations, commodity inflation could perk up, but even then would still be in a burdensome supply issue. So, commodity inflation may be short term if rises, and energy would be the market most likely to increase in price.
Bonds: Bonds remain volatile in a very well worn range. I anticipate bonds to break out to the downside as inflation continues, and I will start to worry more if bond prices go up, as that would suggest a stall in the economy and need for stimulation. The consumer begging for more money is not seemingly bullish for beef.
Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "Mid Day Cattle Comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com
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.
