Soybeans In The Spotlight

By Craig Bewick
NOV 18 2020

US Equity Index prices spent most of the day in slightly negative territory as the market continues to weigh further restrictions in many states with the continuing positive news on vaccine development.  However, a late day sell-off lead to losses of about 1% in the Dow, S&P 500 and Russell 2000.  Implied volatility in the CME Group Equity Index options markets was near steady for most of the day but ticked higher with the late afternoon price break.  WTI Crude Oil prices gave back some gains late in the day as well, trading about .5% higher near the cash equity market close. 

Even though Soybean futures prices were only up by about $.04 per barrel today, we thought the QuikStrike image below was worth sharing.  As we’ve mentioned on few different occasions here in the Key Takeaways section, Soybean prices have seen a substantial rally over the last couple of months.  The lower section of the graph below shows (in gray) the current price of the January Soybean prices with Days until Expiration along the X axis.  As you can see, with about 36 days until expiry, the price of January beans is higher than it’s been in any year since 2016.  The upper portion of the graph provides a good illustration that volatility in the options is also currently higher than at this time in any year since 2016. 

ABOUT THE AUTHOR

Craig Bewick has spent 25 years in futures and options markets, starting at CBOT and CME working in risk management, regulatory, technology, product management and client development. 

After 8.5 years with WH Trading LLC, Craig returned to CME Group as the Director, Client Development and Sales, working to educate and promote futures trading. Craig currently writes for InFocus Options Corner.

Connect with Craig at activetrader@cmegroup.com

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