Q4 2021 Ag Update

Renewed volatility in the lean hog market

Livestock industry participants have faced increased price volatility within the lean hog market. Not only has COVID-19 continued to impact supply chain dynamics, but African Swine Fever (ASF) has spread from China to Europe, with reports of the virus in Canada, the Dominican Republic, and Haiti.  Adding to the mix, informed consumers are still hungry for quality US meat products, which is clearly illustrated by record export numbers to Mexico and several other markets beyond China. This has caused futures prices and implied volatility to roller coaster.

The CME Group CVOL Index, which tracks volatility and skew over time to help put context around current market conditions, illustrates Lean Hog volatility below.

You can use option spread strategies to mitigate risk during these uncertain times within the livestock industry. Read the case study, “Cost-effectively navigating livestock market volatility” to learn how.


Fuel from the field: soybean oil and its energy uses

Legislation from both the US and EU is driving increased demand for biodiesel and renewable diesel, with both alternative fuels being derived from soybean oil. Last year, biodiesel accounted for 35% of US soybean oil use. As biodiesel is considered carbon-neutral due to absorbing CO2 during the process of growing the feed stocks, demand is expected to continually increase, placing pressure on soybean growers and crushers.

This increased demand has driven soybean oil prices to more than double in the past 12 months with Soybean Oil future’s share of the soybean crush margin hitting the highest level in five years. Read more about soybean oil’s role within the renewable fuels market.

Source: USDA Oil Crops Yearbook


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Data as of October 8, 2021 unless otherwise specified.

Record year for Ag options

Year-to-date, Ag options have increased 19% over 2020, with 60% of options volume derived from options strategies. Short-term options (Weekly and Short-dated New Crop) have contributed to 11% of all Corn options volume YTD. Ag traders have evolved in how they trade options by leveraging spread trades and short-term options to help define risk. Use our free QuikStrike tools to build and refine your trading strategies.­

Start here

SAS-ZS spread is now available on CME Globex

CME Group has launched a defined spread between South American Soybean (SAS) futures and benchmark Soybean (ZS) futures. Listed as SAS-ZS on CME Globex, the defined spread offers an efficient way to trade the South American and North American soybean price relationship in one simple transaction.

Learn more

New opportunities to learn

Agricultural Technical Analysis webinar series

Join us for a five-part webinar series examining a variety of technical approaches for trading strategies in agricultural markets. Led by Dan Gramza, President of Gramza Capital Management Inc., the series provides guidance on examining the technical aspects of markets and new tools for trading ‒ whether you’re new to trading or an experienced trader.

Register today

Corn and Soybean webinar with AgResource Brazil

Watch a webinar recording of Raphael Mandarino, General Director of AgResource Brazil, presenting his views on Latin American corn and soybean production, including an outlook for the Corn and Soybean markets in the months ahead.­

Watch now  


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