Chris Swift

Chris Swift Swift Trading Company “Shootin' The Bull” by Christopher B Swift Live Cattle:

Chris Swift Swift Trading Company “Shootin' The Bull” by Christopher B Swift Live Cattle:

Kind of an odd day of trading where cattle feeders just took it on the chin if placing cattle today. Feeder cattle futures were up sharply and the index was up a little over a dollar as well. Feed and fuel were no cheaper and the price of money went up. So, I'm not sure as to why the starting spreads widened so abruptly today, but they did. While not believed an indicator of price direction, the widening spreads do reveal the risks being assumed. With March having 11.6 million head on feed and an approximate 8% higher placement and 10% lower marketing's may well put on feed numbers at just shy of 12 million head for the month of April.

If I thought Tuesday was odd, what am I thinking today? I am in awe of the dynamic price movement, both higher and lower reflecting how discombobbled the market has become. At the close, it appears that fundamentals are at play. Those being, there are going to be more numbers of heavier cattle this fall and early winter due to drought. Estimated higher placements in April is believed the first month of an unknown of, how many more to come. Packers are believed going to continue to pull every string, and hobble every variable cost, to help mitigate the losses. However, it's questionable as to what can be done.

Chris Swift Swift Trading Company “Shootin' The Bull” by Christopher B Swift Live Cattle:

In my opinion, observations from the previous two weeks are believed to have culminated into this week's trading.

Live Cattle: Due to lengthening time on feed, the additional cattle that showed up placed, will most likely hit in the October time frame.

“Shootin' The Bull” by Christopher B Swift Live Cattle: Lower cash bids and higher futures helped to converge basis quickly today.

Chris Swift Swift Trading Company “Shootin' The Bull” by Christopher B Swift Live Cattle: ​

After a few short flurries of price action, traders settled down into a narrower trading range to finish the day. Cattle feeders were profitable last week. The lower trading of feeder cattle in the late fall of last year lasted until November 28. From that point forward, cattle feeders have been paying sharply higher prices, with last weeks projection, nearing $500.00 per head loss. Today's price action didn't help either from a futures stand point of higher feeder cattle futures than fats. Although basis narrowed slightly with the higher futures, the back month discounts are horrific towards attempting to manage adverse price risk. As thought, the wider basis spreads will have producers assuming a lot more of the risk when placing cattle. The Moore Research seasonal tendencies begin to move higher going into the end of July. For the moment, I don't think the downside is complete. When, or if, it is, the question becomes whether new contract highs are made, or just the creation of a time marking sideways to firmer move to satisfy the higher seasonal tendency.