Short-Dated New Crop Options

Short-Dated New Crop Options

Take advantage of hedging flexibility with Short-Dated New Crop options on Corn, Soybeans, Soybean Meal and Oil, and Wheat futures.

  • Lower premiums than standard new crop options due to reduced time value
  • Cost-effective way to take a position in new crop futures contracts
  • Hedge a lower cost “window” version of traditional minimum price contracts
  • Precision timing to trade high impact events on new crop markets, such as USDA reports
  • Manage risk during specific windows of the growing season at reduced costs

Soybean Futures Price (Nov 2014 Contract)

Example: In early June 2014, a producer buys a slightly out-of-the-money put option on new crop futures to hedge against lower new crop price.

  • In the past, the producer had only one choice: Nov 2014 standard put with 1200 strike, premium of 49.1 and 145 days to expiration.
  • Instead, the producer chose a Sep 2014 SDNC option with 1200 strike, premium of 34.1 and 82 days to expiration. 
  • Result: The producer saved 31% on the initial premium, was fully hedged against sharply falling new crop prices, and the SDNC option settled 1 1/2 cents off of the standard option at expiration.

Short-dated New Crop Option Products

2015 Contract Listings

Short-Dated New Crop Option Underlying Futures Short-Dated New Crop Option Contract Months
Corn December 2015 January, 2015, February 2015, March 2015, April 2015, May 2015, June 2015, July 2015, August 2015, September 2015
Soybeans November 2015 January, 2015, February 2015, March 2015, April 2015, May 2015, June 2015, July 2015, August 2015, September 2015
Chicago SRW Wheat July 2015 December 2014, March 2015, May 2015
KC HRW Wheat July 2015 December 2014, March 2015, May 2015
Soybean Meal December 2015 January 2015, March 2015, May 2015, July 2015, September 2015, October 2015
Soybean Oil December 2015 January 2015, March 2015, May 2015, July 2015, September 2015, October 2015

More in Agriculture