CME Lean Hog futures volatility has been mostly range-bound between 10-40% for the past five years. That changed last year in the summer at the beginning of the trade war when we saw volatility spike higher to just under 60%. So far in 2019, volatility has been very low. With events such as Chinese tariff implementation and a potential ASF outbreak on the horizon, there is potential for additional periods of heightened volatility in hogs this year.
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Source: CME Group and QuikStrike
In the last few days, the U.S. and China confirmed a general agreement that China will purchase an annualized $50 billion of ag products. This represents an additional $30 billion than previously committed. It was also indicated that this would include another 10 MMT of soybeans in addition the 10 MMT already secured and likely corn purchases as well. Broader details of total purchases are expected soon.
Learn more about the effects of the Trade War on Agricultural markets here.