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Growth spurt: Ag volumes reach new records in June

Agriculture has experienced the second best quarter ever with futures and options trading 1.8M contracts. In addition, there was record relationship-based trading during June as cross volume averaged 58K and blocks averaged 18K contracts. This performance and growth create greater liquidity in our agriculture markets, helping clients diversify their portfolios and manage risk.

Inside the numbers: See what's behind record options volume in Q2

Given geopolitical tensions, weather concerns, renewable fuel policy and export demand trends, agricultural market participants have utilized options in record fashion to help mitigate risk. There has been a significant rise in usage observed for Soybean Oil, Meal, and short-term options.

The Agricultural options complex set a record ADV of 384,099 contracts for the quarter and also achieved a single-day volume record by trading 976K contracts on June 16.

Four products set quarterly ADV records:

  • Record short-term option ADV
    • Short-Dated New Crop options – 35,173
    • Weekly options – 13,291
  • Record Soybean Oil ADV – 22,878
  • Record Soybean Meal ADV – 18,572
  • Record Calendar Spread Option ADV – 5,405

Market participants are finding relationship-based trading helpful in option execution as volatility and price have made dramatic shifts during the 2nd quarter.

Market participants flock to Livestock options

Market participants have flocked to Livestock options to manage price uncertainty. This is a response to the dry weather patterns across the Midwest, volatile grain markets, limited feed/calf supplies, and new individual stat policies requiring minimum living spaces standards for sows. In June, the combined Livestock options complex (GF, LE, HE) achieved an all-time record average daily volume (ADV) high.

Palm Oil closes the quarter standing tall

Palm oil is ranked the number one produced edible oil globally with soybean oil taking second place.

For the CME USD Palm Oil contract, Q2 of 2023 was the second-best quarter on record with 80,184 contracts traded, up 16% compared to Q2 2022. This growth shows significant customer activity and liquidity in the Palm Oil contract.

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All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.

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