Wholesale boxed beef started the week higher, with Choice up $1.07 to $381.97 and Select jumping $3.17 to $384.51, widening the unusual inversion to a $2.54 premium for Select and signaling strong demand for leaner cuts. At the same time, USDA reported last week’s cattle slaughter at 512,000 head, down both week-over-week and sharply below last year, reinforcing tightening fed cattle supplies. The combination of reduced throughput and firm demand continues to support elevated beef values and a constructive cash market tone.
Pork markets started the week stronger, with the carcass cutout rising $1.11 to $99.81/cwt despite some softness in the butt and ham primals. USDA reported last week’s hog slaughter at 2.472 million head, up week-over-week but slightly below year-ago levels, pointing to improved chain speed alongside still-tight annual supplies. The combination suggests steady demand is absorbing the increased production, keeping overall pork values supported.
According to Bloomberg, tensions in the Middle East escalated as Donald Trump confirmed the U.S. has initiated a naval blockade of the Strait of Hormuz, even as Iran reportedly reached out to reopen negotiations. Bloomberg reports that talks broke down over Iran’s refusal to abandon its nuclear program, prompting the U.S. to shift toward direct pressure on Iranian-linked shipping flows. The development introduces significant risk to global energy markets given the Strait’s role in transporting a large share of global oil and LNG supplies. Iran has warned it could retaliate by targeting regional ports if its exports are disrupted, raising the potential for broader supply interruptions. Crude markets have already moved higher in response, reflecting a renewed geopolitical risk premium and increased volatility tied to the uncertainty around escalation versus diplomacy.
Export inspections highlight a clear divergence across the grains, with corn demand still leading, soybeans stabilizing, and wheat lagging. Corn shipments at 1.78 MMT were lower week-over-week but remain strong overall, with year-to-date exports up nearly 34%, reinforcing that demand is still supportive despite growing South American competition. Soybeans came in at 815k tons, slightly higher on the week and sharply above last year, though year-to-date exports are still down over 25%, underscoring that recent strength is more short-term resilience than a structural shift, especially without China re-engagement. Wheat continues to struggle, with weekly inspections down both week-over-week and nearly 48% year-over-year, reflecting ongoing global competitiveness issues and limited demand support.
Brazil is facing rising consumer pressure from shrinkflation, where product sizes are shrinking even as prices remain steady or increase, intensifying affordability concerns ahead of elections and posing a political risk to President Luiz Inácio Lula da Silva. The trend is becoming widespread across everyday goods like food and household items, driven in part by broader food inflation and global pressures, including geopolitical tensions affecting prices. As a result, public sentiment is deteriorating, with a growing share of Brazilians viewing the economy negatively, challenging Lula’s message of improving living standards and drawing parallels to inflation-driven political struggles seen elsewhere.
Conagra Brands Inc. announced that CEO Sean Connolly will step down, with John Brase set to take over on June 1, marking a leadership shift after a decade of significant stock underperformance. Despite relatively muted premarket reaction, the move reflects ongoing pressure from weak shareholder returns, with the company’s shares down roughly 60% since 2015 and lagging the S&P 500 Consumer Staples Index. Brase, a veteran of J.M. Smucker Co. and Procter & Gamble, is expected to focus on operational improvements and portfolio optimization as Conagra navigates softer demand, shifting consumer preferences away from processed foods, and ongoing margin pressures.
Consumers in Brazil are increasingly facing shrinkflation, with smaller package sizes and steady to higher prices eroding purchasing power, particularly across food and household staples. The trend is gaining visibility as food inflation rises, creating growing dissatisfaction among households and posing a political challenge for President Luiz Inácio Lula da Silva ahead of elections. While the government is pointing to external pressures such as Middle East tensions to explain rising costs, public sentiment continues to deteriorate, with a majority of Brazilians viewing the economy negatively, raising risks to Lula’s reelection outlook.
Chinese Foreign Ministry responded to tariff threats from Donald Trump by reiterating that “trade wars have no winners,” pushing back against the idea of using tariffs as leverage over alleged Chinese support for Iran. The statement underscores China’s broader stance of opposing escalation in trade tensions while signaling it will defend its economic interests if faced with additional U.S. tariffs.
Hogs
Bought 200 Dec 62 puts paid .425
Bought 400 Feb 66 puts paid .5750
Bought 200 June 99 puts paid 1.35 up to 1.375
Bought 300 June 103 straddle paid 5.775
Bought 300 June 96/105/111/120 Iron Condor covered 103.125 paid 3.725
Bought 100 Aug 110/98 combo paid .95 up to .975 bought the call
Sold 200 June 106/100 combo @ .025 down to even selling the call
Live Cattle
Bought 3750 Dec 210/200 put spread paid .95 up to 1.00
Bought 700 June 231 puts paid 1.05
Bought 500 June 235 puts paid 1.50 up to 1.525
Bought 350 Aug 245 puts paid 7.65 up to 8.25
Bought 250 dec 240 straddles 20.500 on a block
Bought 300 Aug 240/244 put spread 1x2 paid 1.625
Bought 250 Dec 240 straddles paid 20.50 On a Block
Bought 500 May/June 230/235 put spread Diag. paid 1.375 up to 1.425
Sold 300 May 240 puts @ .75 covered 248.70 On a Block
Bought 450 May 246 puts paid 2.1750 up to 2.225
Sold 150 Aug 244 calls @ 8.30
Bought 200 Aug 224 puts paid 2.375 up to 2.40
Sold 100 Aug 240 puts @ 6.25 down to 6.20
Sold 500 June 244 puts @ 3.875 down to 3.825
Sold 200 June 226 puts @ 2.65 down to 2.60
Sold 1000 June 240 puts @ 2.70 down to 2.2750
Sold 150 Dec 250/260 call spreads @ 2.775
Bought 400 May 242/240 puts spread paid .275
Feeder Cattle
Sold 100 Aug 334 puts @ 3.875
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