February 2019 Ags Update

Black Sea Wheat and Corn Financially Settled (Platts) Futures

The Basics

  • Outside of North America, Black Sea wheat and corn are global price setters
  • Manage price exposure to the world’s largest wheat export market
  • Track the Russian Wheat and Ukrainian cash export markets
  • Mitigated counterparty risk
  • Talk of Russian export restrictions and continued conflict between Russia and Ukraine increases price volatility, raising need to hedge
  • Spreading opportunities with other CBOT Grain contracts cross-margining and capital efficiencies through CME Clearing

Contract Specifications

  • Financially settled futures and options
  • Contract size 50MT
  • Minimum 12 calendar months listed to trade
  • Tradable off-screen on CME ClearPort as blocks, subject to a minimum of five lots
  • Worldwide access via CME Globex and CME ClearPort

QuikStrike Option Pricing & Analysis

Use the Options Open Interest Heatmap Tool to track where positions are concentrated. View current open interest and changes in volume and OI by strike, put or call, and expiration.

The CME Feeder Cattle Index is intended to serve as a benchmark for the price of cattle being placed on feed at the feedlot, or as defined by the USDA in the monthly “Cattle on Feed” report.

Gain insight into the use of this index to effectively manage risk here.


The Ag complex experienced monumental growth last year; hitting multiple volume and open interest records in Grains and Oilseeds, Livestock and Dairy.

  • All-time volume record of 3.2M on June 19
  • All-time open interest record of 10.1M on June 21
  • Record Corn futures open interest of 2M on June 6
  • Record Soybean futures open interest over 1M on April 16
  • Record Feeder Cattle futures volume of 30.5K on August 7
  • Record CS Cheese options open interest on of 53K on January 30, 2018

Options Growth

  • Over 66M Ag options traded in 2018 with Chicago Wheat, KC Wheat, Soybean Meal, Weekly and Dairy options setting new volume records
  • Ag ETH option volume grew 43% YoY due to trade war issues and major liquidity providers now present “off-hours”
  • For more information, read our monthly update

Callout Corner

  • YoY Growth in Butter ADV
    • Futures +30%
    • Options +113%
  • Butter options electronic volume +244% YoY as 90% is now traded on-screen
  • YoY Growth in Lumber Volume
    • Futures +6%
    • Options +32%
  • Lumber options have seen an ADV Compounded Annual Growth Rate (CAGR) of 7% over the last 5 years

Data as of December 31, 2018, unless otherwise specified
* As of January 31, 2019

Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.

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The information within this communication has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this communication are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.

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