April Ags Update

According to Reuters*, African Swine Fever continues to spread in China, causing the Chinese hog herd to fall 16.6%* in February with the declining trend expected to continue. March 28 USDA-NASS Quarterly Hog and Pigs Report reported a 2% increase in total U.S. hog inventory, 2.2% increase in breeding hogs, and 2.1% increase in market hogs. This means yet another record year for U.S. hog and pork production. Record Hog production in the U.S. and African Swine Fever in China have played a hand in record volatility.

March’s Cattle on Feed Report brought the feedlot data back on schedule following the federal government shutdown. February placements are at 102.2 percent of last year and are the largest for the month since 2000, and marketings were 100.5 percent. The winter has been long, cold, and has been the wettest winter since 1980. Heavy rain and severe weather, including a bomb cyclone in the northern cattle producing states, has caused substantial flooding and has been hard on producers and livestock, with impacts on likely to be felt for many months to come.

Use the Cross Correlation report tool on Quikstrike to identify pairwise correlations across CME Group products.

The rollover, or “the roll”, is a critical juncture in which a trader decides to move their position from the soon-to-expire front month contract to a deferred contract by simultaneously offsetting their nearby position and establishing a like position in a contract further in the future. In grain and oilseed futures markets, this is often accomplished through calendar spreads.

Learn more about liquidity during the corn spread futures roll here.