Agricultural Short-Term options

Explore our suite of diverse Agricultural options to control trading time horizons on your underlying contract of choice.

Features and benefits

Lower your premium cost

Reduced time frames lower option premium costs for hedgers, providing a cost-effective way to gain market exposure.

Control margin costs

When purchasing short-term options, you’ll know exactly what your margin costs will be. Offset futures margins or lower margin requirements.

Tailor your risk coverage

Manage risk around high-impact events or specific time frames with greater precision.

Explore our short-term Agricultural options

All short-term Ag options expire on a Friday and have the same tick size and expiration style as standard options. This commodity lends itself to overlay hedges on long-term positions or spread trading.

PRODUCT UNDERLYING AVAILABILITY LISTING STRIKE INTERVAL
Weekly Options Front Month Year Round Listed up to 4 weeks out at a time 25% up/down
New Crop Weekly Options New Crop February - August Listed up to 4 weeks out at a time 20% up/down
Short-Dated New Crop Options New Crop Year Round Monthly Contracts listed 24 months out 25% up/down, 50% up/down, 3 months out

Understanding old crop vs. new crop

Old crop futures represent grain that has already been harvested, whereas new crop futures represent crops that are yet to be harvested. Both contracts are based on the same commodity but are fundamentally very different and can act accordingly. Old crop contracts typically have more volatility given macro sensitivities in comparison to new crop futures.

Short-term option scenarios

Price reactions will differ between old crop and new crop contracts. Market participants can easily define length of exposure and the underlying contract with our suite of short-term Agricultural options. Explore these example scenarios to learn how market participants can use different futures contracts to help manage risk.

SCENARIO

Old Crop - WEEKLY

New Crop - NCW AND SDNC

Weather

 

 

USDA Reports

 

 

Geopolitical Issues

 

 

Export Change

 

 

Yield Expectations

 

 

Production Hedging / Production Marketing

 

 


Weather-driven views

An active trader wants to enter the corn market given an upcoming heatwave that they expect to impact price. New crop contracts represent grain that has not yet been harvested, so the weather has a bigger impact on price volatility. The active trader chooses New Crop Weekly options for a cost-effective way to gain exposure to short-term market fluctuations.


Scale selling for production hedging

In March, a corn producer is looking to forward-sell 20% of their crop by June, anticipating an impending price drop due to supply surplus later in the year. Using a July Short-Dated New Crop put, the producer can purchase a higher strike for a lower cost compared to December options. The put purchase guarantees the producer the right to sell at the strike price while allowing for upside participation.


Managing price changes driven by reports

In April, a cattle feeder who uses soybean meal as an input and has upside price risk to the nearby futures contract. Forecasts, policy change and USDA reports can have a large impact on prices. Weekly options are based on the front-month futures and expire every Friday. The food supplier utilizes a Weekly call option to hedge the price risk of Soybean Meal rising from the USDA WASDE report.


Compare different short-term options

NEW PRODUCT

For the shortest time frame exposure on new crop, explore New Crop Weekly options.

Product codes
PRODUCT CME GLOBEX BLOOMBERG CQG PROPHETX
Corn CN1-5 OXCA ZCED1-5 CN1-5
Soybean SN1-5 OXSA ZSED1-5 SN1-5
How they are designed:
  • Underlying futures are based on December Corn and November Soybeans
  • Option expiration every Friday that is not a Short-Dated expiration from February through August
  • Same tick size, strike interval, and expiration style as standard options
  • Listed up to 4 weeks out at a time
How you can benefit:
  • Very short time frame, resulting in reduced premium costs
  • Hedge around high-impact events such as USDA WASDE reports pinpointing new crop exposure
  • Volatility is historically lower for new crop leading to lower premium costs compared to old crop

If you’re looking for exposure one to three months out on new crop, explore Short-Dated New Crop options.

Product codes
PRODUCT CME GLOBEX BLOOMBERG CQG PROPHT X
Corn ZC1-5 ODCA ZCE1-5 @OCD
SRW Wheat ZW1-5 ODWA ZWA1-5 @OWD
HRW Wheat OE1-5   KWE1-5 @KWE
Soybean Meal ZM1-5   ZME1-5 @OMD
Soybean Oil ZO1-5   ZLE1-5 @OLD
Soybean Options   ODSA   @OSD
How they are designed:
  • Underlying futures are always based on the new crop
  • Monthly expirations listed year round extending into two crop cycles
  • Same expiration date as standard Grain and Oilseed options
How you can benefit:
  • Hedge long-term exposure in short time frames (weeks to months) to take advantage of market fluctuations on new crop
  • Useful in North American summer months when Corn and Soybeans have the most volatility and standard option premium is expensive
  • Effective way to market a portion of grain throughout the growing season

For the shortest time frame exposure on old crop, explore Weekly options.

Product codes
PRODUCT CME GLOBEX BLOOMBERG CQG PROPHT X
Corn ZC1-5 1-5XA Comdty ZCE1-5 @C1-5
Soybean ZS1-5 1-SSA Comdty ZSE1-5 @S1-5
SRW Wheat ZW1-5 1-SWA Comdty ZWA1-5 @W1-5
HRW Wheat OE1-5   KWE1-5  
Soybean Meal ZM1-5 1-5DA ZME1-5  
Soybean Oil ZO1-5 1-5AA ZLE1-5  
How they are designed:
  • Underlying is the front month futures contract
  • Expire every Friday that is not a standard option expiration
  • Listed up to 4 weeks out at a time
  • Same tick size, strike interval, and expiration style as standard options
How you can benefit:
  • Expirations every Friday, very short time frame (days) on liquid underlying and strong option liquidity
  • Year-round, constant hedging for individuals to manage ongoing front month exposure for end users such as ethanol plants, feed lots, or millers
  • Low premium/exposure for retail traders to take a position in Grains & Oilseeds

Courses

Take self-guided courses on Agricultural futures and options.

If you’re new to Agricultural futures and options, the following courses can help you learn more about the benefits of short-term options and when it’s beneficial to leverage old crop versus new crop contracts.

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