President Trump is reportedly considering whether to withdraw the U.S. from the United States-Mexico-Canada Agreement (USMCA) and has asked advisers to explain why the country should remain in the pact. Because the agreement underpins extensive trade flows across North America, particularly in agriculture, a withdrawal could have significant consequences. Mexico is a leading buyer of U.S. corn, pork, and dairy, while Canada is a major partner in dairy, ethanol, and processed food trade. Exiting the deal could reintroduce tariffs, disrupt integrated supply chains, and create substantial uncertainty across grain, livestock, and broader commodity markets.
The January jobs report was stronger than expected, with nonfarm payrolls rising 130k versus a 70k forecast and the unemployment rate falling to 4.3% even as participation increased. Private payrolls led the gain, jumping 172k, while annual benchmark revisions showed a downward adjustment of 862k jobs through March 2025, slightly less negative than initially estimated. The BLS said extreme weather had no clear impact on the data. Overall, the report supports the Fed’s decision to stay on pause and reduces concerns about labor market weakness, though policymakers will look to upcoming CPI data for confirmation on the inflation outlook, with many economists still expecting.
Kansas City Fed President Schmid struck a hawkish tone, arguing that the labor market only needs roughly 40–50k jobs per month to remain stable and showing no sign of cyclical weakness last year. With inflation still near 3%, he supports maintaining restrictive policy and said he does not see clear evidence that current interest rates are significantly restraining the economy. Schmid warned that additional rate cuts could allow inflation to persist longer, noting that demand still appears to be running ahead of supply improvements. While productivity gains could eventually support stronger growth without fueling inflation, he said the economy is not there yet. He also suggested there may be room to reduce bank reserve demand and shrink the Fed’s balance sheet over time.
Pilgrim's Pride reported stronger-than-expected revenue in its latest quarter, but earnings came in slightly below forecasts as margins remained pressured. From an agriculture standpoint, results reflect steady poultry demand but continued sensitivity to feed costs, particularly corn and soybean meal, which are major inputs. While pricing and volumes supported the top line, profitability continues to hinge on grain markets and operating efficiencies across the chicken complex.
U.S. ethanol stocks rose 0.4% on the week to 25.247 million barrels, slightly below the Bloomberg survey average of 25.485 million, while production rebounded sharply to 1.110 million barrels per day from 0.956 mbpd the prior week, coming in well above expectations and marking a 16.1% weekly increase. The stock build was driven primarily by a large increase on the East Coast, while Gulf and West Coast inventories declined modestly and Midwest stocks were slightly lower. The strong recovery in production, combined with only a small overall stock build, suggests improved plant operating rates and steady demand, keeping the broader ethanol balance sheet relatively stable despite the headline inventory increase.
McDonald’s delivered mixed quarterly results, with modest revenue strength and stable earnings, but softer U.S. same-store sales as value-conscious consumers continue trading down. From an agriculture perspective, steady traffic and heavy promotional activity suggest continued high-throughput demand for key inputs like beef trim for burgers, potatoes for fries, wheat for buns, dairy for cheese, and coffee. However, margin pressure and consumer price sensitivity indicate limited pricing power, which could restrain how much higher input costs can be passed through the supply chain. International strength remains supportive for global beef and poultry demand, but slower U.S. traffic growth reinforces the broader theme of cautious consumer spending, which is relevant for domestic protein demand and feed usage expectations.
Hogs
Bought 300 April 86 puts paid .375 up to .40
Bought 150 June 114 calls paid 2.50 up to 2.525
Bought 400 April 88 puts paid .60
Bought 250 Dec 86 puts paid 7.1750
Sold 250 March 98 calls @ 1.10 down to 1.0750
Bought 300 March 97 calls paid 1.025 up to 1.10
Bought 200 June 100 puts paid 1.60
Live Cattle
Bought 1000 June 200 puts paid 1.25 up to 1.35
Sold 150 Feb 216/208 put spread @ 1.95
Sold 100 March 238 calls 2 3.750
Bought 350 April 248 calls @ 1.9750
Bought 1000 april 244/240 put spread paid 1.90 up to 1.925
Bought 150 April 230 puts paid 2.575
Sold 100 April 242/252 call spreads @ 2.925
Bought 150 March 229/208 put spreads paid .75
Sold 150 April 244 calls @ 4.0 down to 3.925
Feeder Cattle
Bought 100 March 365/350 put spread paid 4.775 up to 4.80
Sold 100 March 350/324 put spread @ 2.40
Bought 250 April 300 puts paid 1.00 up to 1.15
Bought 225 April 334/326 put spreads paid .90
Bought 100 May 324/318 put spread paid .70
| Lean Hogs | | | | | | | | | | |
| Month | Futures | Change | Strike | Implied Vol | Change in IV | Futures Range | Implied BE | Realized BE | 20D Historic Vol | Days to Exp |
| LHG6 | 86.900 | 0.050 | 87 | 4.8 | -0.60 | 0.35 | 0.26 | 0.71 | 13.05 | 7 |
| LHH6 | 93.850 | -1.650 | 94 | 19.5 | 0.10 | 2.05 | 1.15 | 1.04 | 17.64 | 30 |
| LHJ6 | 93.850 | -1.650 | 94 | 17.3 | 0.10 | 2.05 | 1.02 | 1.04 | 17.64 | 65 |
| LHK6 | 98.025 | -1.500 | 98 | 18.1 | 0.10 | 1.53 | 1.12 | 0.94 | 15.16 | 96 |
| LHM6 | 107.475 | -1.425 | 108 | 18.5 | 0.00 | 1.75 | 1.25 | 0.91 | 13.48 | 125 |
| Live Cattle | | | | | | | | | | |
| Month | Futures | Change | Strike | Implied Vol | Change in IV | Futures Range | Implied BE | Realized BE | 20D Historic Vol | Days to Exp |
| LCH6 | 240.975 | 3.550 | 241 | 15.0 | -1.20 | 3.98 | 2.28 | 2.39 | 15.75 | 23 |
| LCJ6 | 240.975 | 3.550 | 241 | 15.2 | -1.10 | 3.98 | 2.31 | 2.39 | 15.75 | 50 |
| LCK6 | 236.575 | 2.775 | 237 | 15.6 | -0.90 | 3.43 | 2.32 | 2.14 | 14.39 | 79 |
| LCM6 | 236.575 | 2.775 | 236 | 15.5 | -0.80 | 3.43 | 2.31 | 2.14 | 14.39 | 114 |
| LCQ6 | 234.225 | 2.175 | 234 | 14.8 | -0.60 | 2.72 | 2.18 | 2.00 | 13.54 | 177 |
| Feeder Cattle | | | | | | | | | |
| Month | Futures | Change | Strike | Implied Vol | Change in IV | Futures Range | Implied BE | Realized BE | 20D Historic Vol | Days to Exp |
| FCH6 | 367.450 | 2.675 | 368 | 15.2 | -1.10 | 3.77 | 3.52 | 3.76 | 16.23 | 44 |
| FCJ6 | 364.600 | 3.325 | 364 | 16.5 | -0.90 | 4.22 | 3.79 | 3.77 | 16.43 | 79 |
| FCK6 | 360.425 | 3.650 | 360 | 17.0 | -0.90 | 4.32 | 3.86 | 3.68 | 16.20 | 100 |
| FCQ6 | 359.775 | 3.625 | 360 | 16.8 | -0.70 | 4.50 | 3.81 | 3.47 | 15.30 | 198 |
| FCU6 | 357.875 | 3.575 | 358 | 16.5 | -0.60 | 4.35 | 3.72 | 3.36 | 14.93 | 226 |
sources
news bloomberg
options data globex
vols bloomberg
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