CME Group, the world's leading derivatives marketplace, today announced that open interest in New Crop Weekly Options has surpassed 500 contracts, while a total of 984 contracts across 28 unique account numbers have traded since launching on January 23. New Crop Weekly Options build on the success of Short-Dated New Crop Options, which launched a decade ago and achieved record average daily volume (ADV) of 11,000 contracts in 2022.
"Market participants are increasingly using options to tailor their risk management strategies around specific milestones in the crop season," said
Tim Andriesen, Managing Director of Agricultural Products at CME Group. "Options premiums tend to be higher when prices are volatile, which is also when investors need protection the most. New Crop Weekly options combine attributes of Short-Dated and Weekly options, offering new crop exposure at an even shorter duration, helping to reduce costs and enhance flexibility for market users."
"We have witnessed the growing popularity of short-dated options across agricultural markets, as well as other markets like equities, as investors look for more ways to protect against short-term event risk," said
Jack Hainline, Risk Management Advisor at Advance Trading Inc. "New Crop Weekly options give the producer even more flexibility to manage their risk during a specific time period, whether that be crop insurance, a government report, or to line up with their flex rent lease."
"We are pleased that the CME Group has introduced New Crop Weekly options," said
Matt Garmon, Head of Trading at Greenfield Commodities, LLC. "This product will make it easier for stakeholders to be decisive about managing short-term price risk by reducing the cost of options on new crop contracts."
Volatility is historically lower for the new crop compared to the old crop, especially earlier in the calendar year. New Crop Weekly options allow market participants to manage their exposure at specific time frames throughout the crop season, like the release of USDA WASDE reports, with less time value built into the price.
CME Group is also reporting records in other Weekly agricultural options products, including record open interest of 1,456 contracts in Soybean Oil Weekly options on March 2, and record ADV of 168 contracts in February. Soybean Meal Weekly options also hit record ADV in January of 650 contracts, with an average daily open interest of 1,702 contracts.
New Crop Weekly options on December Corn and November Soybean futures expire Fridays from February through August. New Crop Weekly options are listed by and subject to the rules of CBOT. For more information, please visit here.
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