CBOT Grains Daily Options Report

Pepsi reports earnings today. 

 

Global equities are showing broad-based strength, with the NASDAQ Composite, S&P 500, and Nikkei 225 all trading at record highs. The synchronized move reflects strong risk appetite, resilient economic expectations, and continued flows into equities, particularly in growth and export-driven markets, reinforcing a bullish global macro backdrop even as valuations become more stretched.

 

The U.S. is urging countries to sign a “trade over aid” declaration that shifts development policy away from traditional foreign aid and toward trade and private investment, arguing that market-based engagement drives more sustainable growth and opens opportunities for U.S. businesses. The push, led by Secretary of State Marco Rubio, reflects a broader effort to reshape foreign policy under an America First framework, with diplomats pressing for quick international support ahead of a United Nations event. While supporters see it as promoting self-sufficiency, critics warn it could weaken humanitarian support systems and leave poorer nations more exposed to market pressures.

 

A sharp drop in bond market–implied inflation expectations, falling from above 5% to below 3.5% over the next 12 months, signals a meaningful shift in investor sentiment toward easing price pressures. This move suggests markets believe recent inflation drivers, particularly energy volatility and supply disruptions, may prove temporary, and that tighter financial conditions are beginning to work. It also reinforces expectations that the Federal Reserve may have less urgency to maintain restrictive policy for as long, while supporting risk assets and easing concerns around sustained inflation in the broader economy.

 

Treasury Secretary Scott Bessent’s meetings with Mexico and France underscore a coordinated U.S. push to strengthen economic ties ahead of key global discussions, with a particular focus on the upcoming USMCA review and broader cooperation with allies. Talks with Mexico signal that preparations for the trade agreement review are intensifying, likely centered on key cross-border trade issues, while engagement with France highlights efforts to align on strategic priorities such as critical minerals and multilateral economic policy. Overall, the meetings reflect a dual approach of reinforcing regional trade relationships while deepening coordination with global partners amid a more complex and uncertain trade environment.

 

USTR Greer’s comments signal a pragmatic shift in the U.S. approach to China, emphasizing that while tensions remain, a complete economic decoupling is not the objective. The proposed U.S.-China Board of Investment would serve as a formal government forum to manage investment and trade issues, suggesting a more structured and ongoing channel for engagement. Overall, the message reinforces that the administration intends to balance strategic competition with continued economic interaction, aiming to manage risks rather than sever trade ties altogether.

China’s Q1 data paints a mixed but telling picture: headline growth is holding up, but the underlying demand side remains weak. GDP came in stronger than expected year-over-year at 5.0%, supported by solid industrial output, which also slightly beat expectations, reinforcing the idea that the production side of the economy remains resilient. However, momentum is less convincing beneath the surface, with quarterly growth slightly missing expectations and retail sales notably disappointing, highlighting ongoing consumer weakness. At the same time, rising unemployment and continued declines in housing prices point to persistent structural headwinds. Overall, it’s a “strong supply, weak demand” setup, where growth is being maintained, but the recovery lacks balance and will likely require continued policy support to sustain.

 

China’s statistics bureau acknowledging economic headwinds reflects a “strong headline, weaker internals” economy, where growth is still holding near target levels but increasingly reliant on exports and policy support rather than domestic demand. Consumer spending and the property sector remain soft, while rising global uncertainties, including geopolitical tensions and slower trade flows, are beginning to weigh export momentum. The message from officials signals that while near-term growth is stable, underlying imbalances and external risks could limit sustainability and keep pressure on the outlook going forward.

 

The latest Fed and policy backdrop points to a U.S. economy that is still growing, but with rising uncertainty and a more complicated outlook for policymakers. The Federal Reserve Beige Book shows activity expanding at only a slight to modest pace, with some regions already seeing stagnation or mild contraction, while the Middle East conflict is emerging as a key wildcard, driving caution in hiring and investment decisions. Fed officials broadly signal that rates are likely appropriate for now, but acknowledge a difficult balancing act as higher energy prices risk pushing inflation back toward ~3% while also weighing on growth. At the same time, policymakers are navigating structural shifts like AI’s long-term productivity impact and ongoing regulatory efforts, while political pressure is building, with Donald Trump pushing for leadership changes and lower rates. Overall, it’s a “stable but strained” setup, where steady growth persists, but risks are building on both the inflation and growth sides, keeping the Fed firmly in wait-and-see mode.

 

ECB commentary suggests policymakers are firmly in wait-and-see mode, leaning toward holding rates in April as they assess the inflation impact of the Iran-related energy shock. Officials emphasize that while inflation has been brought back to target and policy is now broadly neutral, risks remain—particularly around energy prices and the potential for second-round effects. For now, there is little evidence that underlying inflation is re-accelerating, which supports patience, but policymakers are keeping optionality open given how quickly conditions can change. The June meeting is increasingly seen as the more likely decision point, when clearer data on inflation persistence and energy impacts will be available, leaving the ECB cautious but not ruling out further tightening if needed.

 

 

 

Overnight options activity 

Corn

B 2300 sd m 485/505 cs 5

S 400 m 465/490 cs 6 3/8 to 6 1/8

B 600 k 450 c 5 1/8 vs 450

 

Soymeal

B 100 k 335/340 cs 1.70

B 200 n 300 p 2.20

B 100 q 295 p 3.05

 

Wheat

B 100 n 710/760 cs 3 3/8 

 

Kc wheat

B 1000 k 670/690 cs 1 7/8 to 3

B 100 m 660/710 cs 11 1/4

S 250 k 615 p 7 ¾ to 7 1/8 

 

Open interest changes

Corn

Short dated july 530 call buy and dec 430p/540c strangle buys were closing...july 520/550 call spread buy was rolling a long

 

Beans

July 1250/1300 call spread buy was rolling a long....may 1170/1160 put spread sale and july 1220 call buys were new....july 1240,1250 and 1260 call sales were closing

 

Soymeal

May 320 put sales were closing...may 335/345 call spread buy was new

 

Bean oil

May 6550 put sale and may 58/65 call spread sales were closing...july 65 put buys were new

 

Wheat

May 542 put sale was new........may 530 put buy and 610 call sales were closing 

 

Kc wheat

June 610 put buy was new

 

Cvol

Ags 20.02% up .70%

Corn 22.25% up 2.27% 

Beans 15.83% down .18%

Soymeal 24.92% up .63%

Bean oil 27.16% down .34%

Wheat 32.84% up .64%

Feeder cattle 16.80% up .70%

Live cattle 16.55% up .50%

Lean hogs 20.32% up .38%

Class 3 milk 20.13% down .34%

 

Corn

Beans

Soymeal

Bean oil

Wheat

Kc wheat

Miax wheat

Oats

Rough rice

Feeder cattle 

Live cattle

Lean hogs