Q3 2024 Agricultural Update

Agricultural futures and options markets experienced significant growth as traders actively sought to manage risk within their portfolios. With an average daily volume (ADV) of 1.8 million contracts, this quarter set a new record, surpassing the previous high in 2023 by 7%. Notably, the growth can be attributed to the performance of KC Wheat (89,077 ADV), Soybean Meal (212,801 ADV) and Soybean Oil (202,523 ADV).

In Q2, Agricultural options proved to be a powerful tool for market participants seeking to manage risk with greater precision. The release of the USDA Acreage report on June 28 further fueled activity for options. By the end of June, the ADV reached an impressive 351,736 contracts per day.

The lumber market has seen sustained growth as market participants increasingly use Lumber futures to manage volatility and hedge lumber exposure. Despite higher interest rates and surging construction costs, the demand for housing remained steady, with over 1,900 contracts traded per day in June, double the amount compared to this same period last year. 

The average open interest (OI) in June was over 11,000 contracts, with futures reaching over 12,000 open interest on June 14. The average daily notional volume in June was over $25 million, an 83% increase compared to June 2023.

In the face of grain volatility, cattle herd contraction and record-high cattle prices, market participants have moved to options to manage price uncertainty. In June, we saw record average open interest and the second-highest volume quarter in Livestock options (GF, LE, HE) during Q2 2024.