A dry spell in Australia is taking the edge off of a bumper wheat harvest, trimming supplies from one of the world’s largest exporters https://t.co/l0hM8M0obi ...

Group 1: Boxed Beef Market - Boxed beef prices reported by USDA have been declining, with choice beef down nearly $40 and select beef off more than $30 since September 5, despite high retail prices [1] - The average cash price for cattle in the southern US has held near $240, recently slipping to $237, while the nearby October futures contract is priced at $232, indicating a bullish basis of $5 over [2] Group 2: Inflation and Trade Policy - Inflation remains a significant issue in the US, influenced by trade policy, regardless of government reassurances [4] - The soybean industry is not significantly affected by Argentina's export tax changes, as the demand for US soybeans remains stable despite claims of necessity from some industry members [6] Group 3: Federal Reserve and Market Reactions - Following a 25-basis point rate cut by the Federal Reserve, the US dollar index initially fell to 96.22 but closed higher, indicating market volatility in response to monetary policy [8] - Fed Chairman Powell's comments on inflation and job concerns were not surprising to the market, suggesting a cautious approach is expected [9] Group 4: Tyson Foods and Corn Market - Tyson Foods announced it would stop using high fructose corn syrup in its products, which is not expected to collapse demand for US corn, as indicated by the bullish May-July futures spread [10] - The May 2026 corn futures contract is priced near $4.5075, showing a similar market structure to the previous year when funds built a net-long position [11]

Summary of Key Points from the Conference Call Industry Overview - The focus is on **Global Commodities**, particularly the volatility carry strategies in the commodities market, as the worst tariff and geopolitical shocks are believed to be behind us [1][2][22]. Core Insights and Arguments - **Volatility Carry Strategies**: There are opportunities in commodities volatility carry QIS (Quantitative Investment Strategies) as volatility premia are expected to recover. This is attributed to a structural imbalance between volatility buying and selling in commodities compared to other asset classes [2][10]. - **Market Conditions**: The current macro backdrop is seen as favorable for volatility carry strategies, with expectations of a shift into a "Goldilocks" regime, which historically has led to better performance for commodities volatility carry strategies [5][26]. - **Performance of Strategies**: Volatility carry strategies have faced challenges in 2025 due to negative volatility premia caused by tariff and geopolitical shocks, but there is optimism for recovery as these shocks subside [4][24]. - **Specific Commodity Considerations**: - **Oil**: Brent has historically higher volatility premia than WTI due to geopolitical risks and hedging activities [31]. - **Gold**: Weekly options have shown better performance than monthly options due to increased liquidity and demand for short-term optionality [41][36]. - **Copper**: The market is expected to stabilize following tariff clarity, which should benefit volatility carry strategies [44]. Additional Important Content - **Quantitative Research Findings**: The quant research team has confirmed the continuation of a "Normal" macro regime, with potential for a shift to "Goldilocks," which is favorable for commodities volatility carry strategies [5][26]. - **Geopolitical Risks**: Ongoing geopolitical tensions, particularly in the Middle East, and US sanctions on Russian oil are noted as risks that could impact crude oil volatility [23]. - **Seasonality in Curve Carry Strategies**: Curve carry strategies have been highlighted as top performers among major commodities QIS YTD, with expectations for continued positive returns into Q4 due to strong seasonal trends [7][48]. Data and Figures - **Volatility Dashboard**: The report includes a dashboard showing the current implied and realized volatility levels across various commodities, indicating a return to positive volatility premia for most major commodities [11][19]. - **Historical Performance**: Historical data suggests that volatility carry strategies tend to perform better under stable macro conditions, with significant underperformance during periods of heightened uncertainty, such as the GFC and COVID-19 pandemic [15][24]. This summary encapsulates the key insights and data points from the conference call, providing a comprehensive overview of the current state and outlook for the commodities market and volatility carry strategies.

Corn Market - The corn market showed little activity with December futures (ZCZ25) remaining unchanged after a trading range of 1.75 cents and a volume of 12,000 contracts [1] - The US is expected to harvest a large corn crop in 2025, and the commercial side has priced in a bearish scenario, as indicated by the stabilization of futures spreads [1] - The National Corn Index was reported at $3.78, up 2.25 cents for the day, with the national average basis at 41.75 cents under December futures [1] Soybean Market - The soybean market opened lower with November futures (ZSX25) trading in a range of 4.5 cents and a volume of 10,500 contracts [4] - The November-January futures spread covered 69% of the calculated full commercial carry, indicating a bearish sentiment compared to 64% a year ago [4] - The National Soybean Index was calculated at $9.5450, with the national average basis at 79.0 cents under November futures [4] Wheat Market - The wheat market was mostly lower, with December futures (ZWZ25) remaining unchanged and a total overnight trade volume of about 5,000 contracts [5] - The Dec-March futures spread covered a neutral 51% of the calculated full commercial carry, while the National SRW Index was at $4.4850 [5] - The National HRW Index was reported at $4.33, marking its lowest monthly close since July 2020 [5]

Trade Agreement - Bangladesh has signed an initial agreement with US wheat growers to import 700,000 tons of wheat annually for five years [1] Geopolitical Considerations - The agreement is made as Dhaka faces the threat of steep US tariffs [1]