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CME Livestock Daily Options Report

By: PJ Quaid, Senior VP, Agricultural Commodities

President Trump said a long and productive phone call with Chinese President Xi covered a broad range of issues including trade, energy, geopolitics, and agriculture, and pointed to improving U.S.-China relations. He said China is considering buying up to 20 million tons of U.S. soybeans in the current season, with a commitment of 25 million tons discussed for next season, alongside potential purchases of additional U.S. agricultural products and increased imports of U.S. oil and gas. While the soybean volumes were framed as under consideration rather than finalized, the comments suggest Beijing may accelerate near-term buying and reinforce optimism around renewed agricultural trade engagement, supporting expectations for stronger U.S. soybean export demand in the months ahead.

 

US ethanol data from the DOE showed a modestly constructive tightening in balances, with total stocks falling 1% on the week to 25.136 million barrels, below both last week and analyst expectations. The draw was driven by a sharp drop in plant production to 0.956 million barrels per day, down more than 14% week over week, with declines concentrated in the Midwest and Gulf Coast. Blender inputs also fell materially, indicating weaker near-term blending demand, though regional movements were mixed. On a year-over-year basis, total ethanol stocks are nearly 5% lower, underscoring a structurally tighter inventory backdrop even as production and blending slowed in the latest week.

 

The January ISM Services report showed the U.S. services sector remains firmly in expansion, with the PMI holding at 53.8 and coming in above expectations, supported by business activity rising to a 15-month high. Demand remains healthy but is cooling modestly, as new orders slipped to 53.1 from December’s stronger pace. Employment was essentially flat at 50.3, indicating stable but cautious hiring. The main concern was inflation, with the prices paid index climbing to 66.6, signaling persistent cost pressures in the services sector. Overall, the data point to a resilient, late-cycle economy with solid growth but sticky inflation that continues to limit the case for near-term rate cuts.

 

Bunge Global SA shares rose after the company pointed to potential upside from forthcoming US biofuels policy clarity and continued integration of Viterra, even as its 2026 earnings outlook came in below analyst expectations. Bunge forecast adjusted earnings of $7.50 to $8.00 per share for 2026, compared with analyst estimates near $8.83, though fourth-quarter results exceeded expectations and supported the stock. Management said it expects greater visibility on federal biofuels blending mandates in the coming weeks, which could improve earnings prospects. The stock climbed as much as 4.1% in early trading and is up roughly 35% year to date, reflecting optimism around biofuels policy and strategic integration benefits despite lingering regulatory uncertainty.

 

Hogs

Bought 350 June 100 puts paid 1.4750

Sold 100 March 98 puts paid @ 2.1250

Bought 2000 June 108/106 put spread paid .70

Bought 150 June 98/88 put spreads paid .725

Sold 2000 April 97/95 put spreads @ .70

Sold 200 Aug 114/120 call spread @ 1.90

 

Live Cattle 

Sold 700 April 242 calls @ 5.30 down 5.225

Sold 300 Feb 240/238 puts @ .375 down to .35

Bought 200 Aug 236/218 put spreads v 244 calls paid .05 up to .10

Bought 350 March 240 puts paid 2.5 up to 3.0

Bought 300 Aug 226/244 strangle 11.70

Bought 300 March 241 puts paid 3.20 up to 3.250

Bought 400 April 244/250 call spreads paid 2.25 up to 2.45

Bought 200 April 98/90 combo paid 2.725 up to 2.75 buying the call.

Bought 400 Feb 243 calls paid .525 up to .5750

Bought 900 April 246 calls paid 3.50 up to 4.30

 

Feeder Cattle 

Bought 1300 March 372/368 put spread paid 1.725 up to 1.875

Bought 150 March 390 calls paid 3.85 up to 3.975
Bought 200 March 370 calls paid 8.7750 up to 10.15

Lean Hogs          
MonthFuturesChangeStrikeImplied VolChange in IVFutures RangeImplied BERealized BE20D Historic VolDays to Exp
LHG6 88.000-0.550888.5-0.601.200.470.8214.8614
LHH6 98.4500.3009819.50.201.721.211.0216.4737
LHJ6 98.4500.3009817.50.401.721.091.0216.4772
LHK6 101.750-0.17510218.70.301.681.200.9114.13103
LHM6 110.575-0.30011018.80.401.851.310.8512.23132
Live Cattle          
MonthFutures ChangeStrikeImplied VolChange in IVFutures RangeImplied BERealized BE20D Historic VolDays to Exp
LCG6 240.5250.20024117.61.402.632.671.7311.452
LCH6 241.8000.17524213.80.003.252.101.8612.1930
LCJ6 241.8000.17524214.0-0.103.252.131.8612.1957
LCK6 237.2250.60023714.7-0.102.922.201.8012.0786
LCM6 237.2250.60023814.5-0.102.922.171.8012.07121

 

Feeder Cattle         
MonthFutures ChangeStrikeImplied VolChange in IVFutures RangeImplied BERealized BE20D Historic VolDays to Exp
FCH6 370.0752.15037015.50.005.753.613.7215.9451
FCJ6 367.5001.62536816.5-0.205.283.823.7316.1186
FCK6 363.7501.35036417.10.004.903.923.6215.81107
FCQ6 362.2751.45036216.7-0.105.803.813.4114.93205
FCU6 359.9001.50036016.50.004.853.743.3014.54233

sources
options data globex
news bloomberg
vols bloomberg 

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