Q2 2022 Agriculture Update

Manage risk in times of uncertainty

Recent geopolitical events combined with tight grain and oilseed supply have created unprecedented uncertainty in global agricultural markets. This has driven growth in both emerging and benchmark Agricultural futures and option products:

  • The Crude Palm Oil suite of products struck the second highest quarterly volume record since inception, with a total volume of 68,389 contracts cleared in Q1.
  • The Fertilizer futures suite has seen increased participation with average daily volume reaching 231 contracts in February (+61% YoY).
  • The data graph below shows the implied volatility in 2008 vs. 2022 on the December Corn contract.

Source: Powered by QuikStrike

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Crude Palm Oil activity on the rise

  • With the successful restructuring of the swap contract in January, all volumes and OI are now centered on the CME USD Malaysian Crude Palm Oil Calendar futures contract (CPO).
  • CPO open interest stands out at 49,343 contracts at the end of March 2022, extending out to the Dec 2023 contract.
  • Client interest and activity remained elevated as the edible oil prices continued to be driven by geopolitical risks, export restrictions, and biofuel mandates.

Source: USDA Oil Crops Yearbook

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View the current version and an archive of the Ag Update online at cmegroup.com/education/ag-update.html

Agricultural options set records

Agricultural options posted a record Q1 ADV of 325K contracts, primarily driven by SRW Wheat (+75% YoY), KC Wheat (+87% YoY), and Lean Hogs (+41% YoY).   

Short-Dated New Crop options (SDNC) saw high volume as clients turned to SDNC for lower premiums.

 Learn more about Short-Dated New Crop options

 Excell with Options: Trading agricultural options in a volatile market


Livestock complex highlights

Domestic and export demand for pork remained strong with some of the highest weekly hog prices since 2014.   

March 2022 ranks as one of the largest volume months on record.

 Open Markets: Pork Industry Enjoys Strong Prices, But Faces Rising Costs


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All data is at April 22, 2022 unless stated otherwise


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