By: PJ Quaid, Senior VP, Agricultural Commodities
The NASDAQ Composite has now risen for 10 consecutive sessions, marking a sustained stretch of momentum that reflects improving risk appetite and steady buying interest in growth and tech stocks. A run of this length typically signals strong underlying sentiment, though it can also raise the risk of short-term consolidation as the market becomes more extended.
Today is the last day of the Goldman roll.
BofA and Morgan Stanley report earnings tomorrow.
UBS argues that Chevron’s renewable fuels business is materially undervalued, with current weak renewable diesel and biodiesel margins masking a significant earnings inflection beginning in 2026. The firm highlights that updated Environmental Protection Agency Renewable Volume Obligations will drive a sharp increase in biomass-based diesel demand, supporting a rebound in margins and cash flow, with Chevron expected to generate roughly $440 million in incremental EBITDA from 2026–2028 and potentially $1 billion in additional cash flow as diesel and crush margins recover. UBS also points to Chevron’s expanded exposure to soybean processing through its joint venture with Bunge Global, which adds leverage to improving soy crush economics. Despite near-term margin pressure, UBS maintains a bullish stance with a $218 price target, framing the current environment as a setup for a structurally stronger earnings profile tied to biofuel policy support and tightening feedstock dynamics.
Analysts’ estimates for the upcoming April US Department of Agriculture Cattle-on-Feed report point to a largely neutral-to-slightly supportive setup, with April 1 on-feed inventories expected at 99.8% of last year (range 99.4–100.1), suggesting feedlot supplies remain essentially flat year-over-year. March placements are projected sharply lower at 93.5% (range 92.3–94.5), reflecting tighter feeder cattle availability and likely weather or cost-related placement delays, while marketings are also seen lower at 93.7% (range 92.3–95.3), indicating slower turnover through feedyards. The combination of reduced placements and softer marketings implies continued tightness in the feeder pipeline and supports the narrative of constrained future fed cattle supplies, even as current on-feed levels remain steady. Overall, the report is expected to reinforce the bullish longer-term supply structure without providing a near-term shock to the market.
Scott Bessent warned that the global economy cannot sustain China running massive trade surpluses near $1 trillion, signaling growing concern about global imbalances and their destabilizing effects. His comments suggest increasing pressure on China’s export-driven model and imply that such surpluses could intensify trade tensions and policy responses worldwide.
CONAB’s update modestly increased Brazilian soybean and corn yields and production, confirming a very large but largely anticipated crop. Soybean output was raised to 179.15 MMT and corn to 139.57 MMT, reinforcing that South American supply remains heavy, though the pace of upward revisions is slowing. For soybeans, the focus shifts from crop size to export flow, keeping pressure on U.S. shipments during Brazil’s peak window. For corn, the stronger safrinha outlook leans slightly bearish by adding to global supply just as the U.S. needs demand traction. Overall, the report caps upside more than it creates new downside, with market direction increasingly dependent on weather, logistics, and export competitiveness rather than further production increases.
Hogs
Bought 300 June 100 calls paid 4.625 covered 103.00
Bought 1000 June 110 calls paid .70 up to .75
Bought 250 May 98/96 put spread paid 1.60 up to 1.625
Bought 350 Aug 90/104/112/126 Iron Condor paid 4.975 up to 5.00 covered 105.45
Bought 500 April 91 puts paid .4750 covered 90.575
Bought 200 May 95/97/99 call fly paid .25
Live Cattle
Bought 150 Dec 210 puts paid 2.325 up to 2.35
Bought 400 May 244/242 put spread paid .30
Sold 200 June 246/228 put spread @ 5.175
Sold 100 June 240/236 put spread @ .65
Bought 800 Dec 210/200 put spread paid .95
Bought 100 May 249/246 put spread paid .825 up to .85
Sold 200 June 244/230 put spread @ 2.10
Bought 400 June 235/233 put spread paid .225
Bought 200 Oct 240/232 put spreads paid 2.775
Bought 150 June 232/220 put spread paid .60
Bought 200 Oct 200 puts paid .8750 up to .95
Bought 250 June 250/260 call spread paid 4.00
Bought 800 June 250 calls paid 6.0750 up to 6.15
Sold 400 June 262 calls @ 1.6250
Bought 300 June 264 calls paid 1.35
Feeder Cattle
Bought 450 May 376/370 puts spread paid 2.475 up to 2.575
Bought 250 Aug 330/400 Strangle paid 7.90 On A Block
Bought 300 Aug 300 puts paid 1.0750 up to 1.1250
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Global protein supplies remain constrained, but beef markets are entering a period where trade access may matter more than underlying demand. As major exporters approach Chinese import thresholds, competition for alternative buyers could become a more important pricing driver than supply scarcity itself.
June 15 – A peace deal has been reached with Iran. Stock futures gapped higher as a result, while commodity prices came under pressure. And oh yes, it’s also Fed week on Wall Street. The VIX traded near 16, while the dollar index traded below 99.5. Yields on 10-year Treasuries are trading near 4.45%, while yields on 2-year Treasuries are trading near 4.04%. WTI crude oil prices traded to a three-month low, probing below $80 per barrel at one point early this morning, while Brent dropped below $83 per barrel. The grain and oilseed markets followed the energy markets lower as well on the news.
New World Screwworm has returned to the United States after decades of absence, landing in a cattle market already stretched by historically high beef prices and tight supply. Ben Klieve of Benchmark Institutional maps the cost pressures, movement restrictions, and structural risks now facing both beef and dairy producers.
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