CME Livestock Daily Options Report

By: PJ Quaid, Senior VP, Agricultural Commodities

Wed, 28 Jan 2026, 21:52

The Federal Reserve left interest rates unchanged at 3.5%–3.75% in a widely expected decision, despite two dovish dissents from Governors Christopher Waller and Stephen Miran who favored a 25-basis-point cut, reinforcing the view that the Fed has entered an extended pause rather than the start of a renewed easing cycle. Policymakers upgraded their assessment of economic growth, citing solid expansion, removed language suggesting rising downside risks to employment, and described the labor market as showing signs of stabilization, while reiterating that inflation remains somewhat elevated. The statement and accompanying commentary underscored that risks to the Fed’s dual mandate are now more balanced and that future policy moves will be driven strictly by incoming data, not precautionary cuts. Markets largely viewed the outcome as uneventful, with rate-cut expectations already reduced, while Waller’s dissent drew attention as potentially boosting his standing in speculation over the next Fed chair.

Treasury Secretary Scott Bessent reaffirmed that the United States maintains a strong-dollar policy, emphasizing that it is achieved by setting sound economic fundamentals rather than through market intervention, and stated the U.S. is “absolutely not” selling dollars against the yen. His comments helped spark a broad rebound in the dollar after it had fallen sharply following President Trump’s remarks that he was comfortable with the currency’s recent decline. Bessent’s message was seen as an effort to calm markets by signaling policy stability and pushing back against concerns that the administration might tolerate or pursue a rapid depreciation of the dollar.

U.S. Trade Representative Jamieson Greer and Mexico’s economy secretary said discussions between the two countries have made substantial progress and agreed to continue talks focused on non-tariff barriers, signaling forward movement on regulatory, customs, and market-access issues that affect bilateral trade. The comments suggest both sides are working to resolve frictions beyond tariffs and keep negotiations moving under the broader U.S.–Mexico trade relationship.

U.S. ethanol stocks fell to 25.4 million barrels, down 339 thousand barrels or 1.3% on the week, compared with market expectations near 25.8 to 25.9 million barrels, leaving the draw broadly in line with expectations. Production eased slightly to 1.114 million barrels per day, down 5 thousand barrels per day week over week, but remained well above the Bloomberg survey average near 1.079 million barrels per day, signaling plants are still running at a strong pace despite winter logistics challenges. The weekly stock draw was driven mainly by the Gulf Coast, while the Midwest saw a modest build, leaving the overall report neutral to mildly constructive, with inventories trending lower but no sign of acute tightening given steady production.

Canada and South Korea have signed a memorandum of understanding aimed at attracting South Korean automobile manufacturing and related investment to Canada, according to the Globe and Mail. The agreement seeks to encourage South Korean automakers and suppliers to expand production and supply chains in Canada, supporting jobs, clean-vehicle manufacturing, and long-term industrial investment while strengthening economic ties between the two countries.

Senate Majority Leader John Thune said Democrats should be working toward a deal with the White House on government funding and homeland security policy as the risk of a partial government shutdown grows near the end of the week. Republicans are pressing Democrats to negotiate potential executive actions the White House could take to address GOP concerns over immigration enforcement, while Democrats want Department of Homeland Security funding split from the broader spending package and policy reforms included in law. The standoff centers on a six-bill funding package, with Senate Republicans moving forward procedurally as funding deadlines approach, and Democrats arguing DHS should be handled separately to allow the rest of the government to be funded, though a handful of GOP senators have signaled openness to dropping DHS from the package.

Hogs

Bought 150 June 110 calls/ sold May 90 puts paid 3.05 up to 3.075 covered 108.50

Bought 200 June 108 puts paid 4.55 up to 4.575 covered 108.475

Bought 700 Feb 84 puts paid .05 up to .10

Bought 350 feb27 84 puts 5.950 to 6.075

Bought 1000 june 114 calls 2.350 to 2.500

Bought 1900 april 96 call 3.200 covered vs 95.850

Bought 450 aug 108 calls 5.600

Bought 350 Dec 80/74 put spread v. 90 calls paid .150 to .205

Bought 300 Oct 86/96 strangle paid 6.975

Bought 350 Feb 82 puts paid .05

Sold 250 Oct 90/82 put spread v. 100 calls @ .90

Live Cattle

Bought 400 Feb 237 puts 3.55

Sold 150 April 234 calls @ 6.65 down to 6.5750

Bought 175 April 225/220 put spread paid .675 up to .750

Bought 250 Aug 242/240 put spread paid 1.25

Bought 500 Aug 244 calls paid 3.70 up to 4.100

Sold 250 April 237/234 put spread @ 1.125 down to 1.075

Feeder Cattle

Sold 500 March 360 puts @ 7.20 down to 6.6250

Lean Hogs
Month	Futures	Change	Strike	Implied Vol	Change in IV	Futures Range	Implied BE	Realized BE	20D Historic Vol	Days to Exp
LHG6	87.950	-1.100	88	10.5	0.80	0.92	0.58	0.99	17.85	21
LHH6	95.150	-1.675	95	19.4	1.00	1.55	1.16	1.15	19.27	44
LHJ6	95.150	-1.675	95	18.2	0.90	1.55	1.09	1.15	19.27	79
LHK6	98.850	-1.575	98	18.3	0.50	1.20	1.14	0.98	15.74	110
LHM6	107.925	-1.450	108	18.5	0.90	1.30	1.26	0.87	12.82	139

Live Cattle
Month	Futures	Change	Strike	Implied Vol	Change in IV	Futures Range	Implied BE	Realized BE	20D Historic Vol	Days to Exp
LCG6	236.825	1.225	237	13.8	0.40	3.13	2.06	1.93	12.92	9
LCH6	238.725	1.325	239	13.4	0.00	3.40	2.02	1.94	12.89	37
LCJ6	238.725	1.325	239	13.8	0.00	3.40	2.08	1.94	12.89	64
LCK6	234.450	1.200	234	14.6	-0.10	3.10	2.16	1.83	12.36	93
LCM6	234.450	1.200	234	14.7	-0.10	3.10	2.17	1.83	12.36	128

Feeder Cattle
Month	Futures	Change	Strike	Implied Vol	Change in IV	Futures Range	Implied BE	Realized BE	20D Historic Vol	Days to Exp
FCF6	368.100	1.250	368	6.5	-1.10	2.27	1.51	2.87	12.36	2
FCH6	365.850	3.850	366	15.1	-0.20	6.90	3.48	3.78	16.40	58
FCJ6	364.300	3.650	364	16.2	-0.30	6.77	3.72	3.83	16.70	93
FCK6	361.350	3.400	362	16.6	-0.20	6.65	3.78	3.79	16.65	114
FCQ6	360.125	2.850	360	16.7	-0.40	6.13	3.79	3.62	15.97	212

sources
news bloomberg
options data globex
vols bloomberg

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

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August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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