April 2019 Ags Update

Livestock Recap

Lean Hogs

According to Reuters*, African Swine Fever continues to spread in China, causing the Chinese hog herd to fall 16.6%* in February with the declining trend expected to continue. March 28 USDA-NASS Quarterly Hog and Pigs Report reported a 2% increase in total U.S. hog inventory, 2.2% increase in breeding hogs, and 2.1% increase in market hogs. This means yet another record year for U.S. hog and pork production. Record Hog production in the U.S. and African Swine Fever in China have played a hand in record volatility.


March’s Cattle on Feed Report brought the feedlot data back on schedule following the federal government shutdown. February placements are at 102.2 percent of last year and are the largest for the month since 2000, and marketings were 100.5 percent. The winter has been long, cold, and has been the wettest winter since 1980. Heavy rain and severe weather, including a bomb cyclone in the northern cattle producing states, has caused substantial flooding and has been hard on producers and livestock, with impacts on likely to be felt for many months to come.


Use the Cross Correlation report tool on Quikstrike to identify pairwise correlations across CME Group products.

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March Highlights

  • Record Corn futures volume on March 29 of 1,128,597 contracts
  • Record Lean Hog futures & options volume on March 22 of 176,596.
  • Record Lean Hog futures & options open interest on 3/29/2019 of 644,537
  • Second highest Open interest day in KC Wheat options on March 21 of 106,864
  • Second highest Dry Whey options volume on March 19 of 660 contracts

Black Sea Highlights

(Data as of Mar 31st)

  • Black Sea Wheat futures (BWF) have traded nearly 30K YTD 2019, up 76% over same period last year
  • Black Sea Corn futures (BCF) have traded over 13K YTD 2019 (vs 1,600 lots in same period last year). Month end open interest is 5.6K, out to new crop Dec 19
  • Over 7K Black Sea Wheat options traded since start of the year 
  • 3,543 contracts traded on Globex so far in 2019. Market participants executed orders down the curve.

Options Update

  • Lean Hog options hit an all-time open interest record of 364,316 and daily volume record of 51,322 contracts
  • Driven off the March 29 Planting Intention report, Corn options hit the second highest volume day with 352,714 contracts.
  • July Grain and Oilseed implied volatility levels at historical lows at the end of March
  • Record R-Cross volume in percent and absolute terms in the month of March

Monthly Report

Callout Corner

  • Record futures & options open interest in combined Butter, Class IV Milk, Dry Whey, and Non-Fat Dry Milk open interest of 60,995 on March 29.
  • Global markets are pulling US prices higher.
  • Culling of dairy cows is slightly higher, thus impacting overall milk production.
  • Markets are predicting that prices will be higher in the second half of the year due to some slowing of milk production in Oceania.