Livestock in hog heaven

Remarkably, hog futures contracts closed higher for the seventh day in a row, buoyed by hints and hopes that China might be ready to talk about trade with the U.S. The appointment of a new chief of trade and the effect of the weak U.S. dollar contributed to the bullish sentiment. Bird flu and the shortage of eggs limits alternative sources of protein while cattle prices are also at record highs. The seven consecutive day rally in hogs was especially impressive since meat prices tend to have a correlation with the stock market, which had multiple ups and downs. Don’t expect any bargains when you pull the grill out of the garage.

Not much luck for U.S. buck

The 8% decline of the U.S. dollar since the beginning of this year has been described as an historic drop when compared to other world currencies. It is reported to be the worst year’s start since 1995. The weak dollar makes foreign goods more expensive to consumers, and our back and forth trade policies have led to dumping of U.S. assets. The dollar slide raises questions about whether the currency will remain a safe haven for investors across the world. Some issues raised by the decline include waning of America’s exceptionalism, a looming recession possibility, a potential shift to the yen or Swiss franc as safe havens and a negative consumer confidence. While de-dollarization, reducing the role of U.S. currency is a possible concern, to date, no viable alternative to the dollar has provided the liquidity, security and scalability of U.S. currency.

Oats: “Beige, bland and boring” but prices soaring

Oat futures rose 25% from September through November, and prices continue to rise. In the 18th and 19th centuries, the grain provided fuel for horses, the main form of transportation used in farming and in warfare. At the same time, population increases saw the grain become a luxury as demand increased beyond supply. By the 20th century, health benefits and production improvements made oat products popular and affordable. Today, 90% of world crops still provide animal feed for horses, cattle and sheep, while human consumption is largely associated with oatmeal, the gluten free, healthy breakfast staple and specialty items such as oat milk. Eighty percent of Canadian oats come to the U.S. with General Mills and Quaker depending on the import for their production and livestock farmers looking for feed. Canadian crops are down anywhere from 13% to 20% due to weather issues.

CME midday prices: (Prices are as of midday Thursday, April 17, markets are closed for Good Friday) Price per bushel: July Soybeans, $10.47; July Corn, $4.92; July Wheat, $5.67 July Oats $3.46. June Livestock per 100 pounds: Cattle, $203.50; Hogs, $98.10. Metals per troy ounce: June Gold, $3,330; May Silver, $32.55. May Copper per pound: $4.70. May Crude oil per barrel: $64.70. The June S&P futures contract is trading at 5,343.00.

Pinion Futures LLC (PF), a CFTC registered Introducing Broker and NFA Member (NFA #0284447) is a fully owned subsidiary of Pinion Risk Management LLC. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors. Clients may lose more than their initial investment. All information, communications, publications, and reports, including this specific material, used and distributed by PF shall be construed as a solicitation for entering into a derivatives transaction. PF does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.