Swift Trading Co.

"Shootin' The Bull" Commodity Market Comments...

For Thursday, March 26th

Live Cattle: When found, ground beef prices have skyrocketed at retail outlets.  Over 3 million consumers applied for unemployment last week.  Those checks won't get there for a few more weeks, or will the stimulus check.  Next Thursdays unemployment may exceed this weeks.  As believed, the building continues to crumble down.  This morning, Gaylord Opryland hotels have shut down.  This is Nashville's premier meeting place.  Controversy and lack of details on the subsidies may have been some of the price action this week.  Monday's limit up day right off the cuff seemed a little suspicious to begin with.  As details, or actually lack of emerged, traders and producers alike knew the board is the only way to manage risk.  As we all know how fast adjustments can be made, it appears that the redistribution of food is as quick as anything else.  Were consumers to begin settling into their new habits, it will take longer for them to break them.  
I think there is good reason to think that some consumers will eat better, or eat more while at home.  I think that most though will continue to contract in their discretionary spending, rather than redistribute spending at the same level on other or more lavish food items. This won't be known until consumers have found a spending level consistent with the ever changing ordeal of the virus.      
Feeder Cattle: A quick window opened this week in which significant volume has changed hands. The previous owners are believed grateful they were able to rid themselves of violent price action.  The new buyers though were just handed their troubles.  With it unknown whether subsidy payments will be available, and a belief that increasing retail beef prices and decreasing consumer spending is not bullish cattle prices, the new owners will have to manage their risk.  Potentially this is a portion of today's near limit down move.  I would urge you to consider marketing inventory in a manner that is beneficial to your operation. 
Lean Hogs: Index higher and futures limit down.  Hogs & pigs report shows a 4% increase.  If China still does not take large portions of US product, we will swim in it, and with a lower consumer discretionary spending habit, cheaper competing meat proteins will impact consumer spending on beef.


Corn: July meal traded to $313.90 in the overnight.  This did not allow for any purchases at the desired $313.00 level.  The lower trade today and higher close leads me to believe the correction is complete.  A trade of July meal above $322.80 will lead me to believe the meal market is turning higher.  Corn is stagnate.  Unfortunately, I anticipate corn to have another leg lower.  As neither crude or the products have had any bounce at all, ethanol can't be doing well.  


Crude: Energy is believed creating a wave 4.  This leads me to anticipate further declines in energy.  
US Treasury Bonds: Bonds are contracting significantly in their daily trading ranges.  I anticipate a trend to resume higher with much less daily price range. 

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
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 their 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.

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