Q3 2020 Cross-Commodity Recap

CME Group offers the widest range of global benchmark products across all major asset classes, including a suite of futures, options, and cash. At CME Group, we also provide access to OTC markets, help optimize portfolios, analyze data, and help manage risk. The Cross-Commodity Recap includes the latest CME Group Commodity product updates and news on the metals, energy, and agricultural markets – it is our curated look at these Commodity products.

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Top-of-book bid/ask spread has returned to levels seen prior to the emergence of Covid-19 in mid-March. Average top of book spread now rests at just above one tick (10 cents) wide.

GC liquidity has improved significantly since the start of the second quarter.

GC inventories held in COMEX depositories reached 28M oz. as of June 30, 2020 ‒ a new record.

View COMEX Gold inventory data  

Source: CME Liquidity Tool, June 29, 2020

The Gold (Enhanced Delivery) futures contract is being amended to expand allowable delivery locations to include London.

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Global gas price convergence and uncertainty around supply and demand heading into the upcoming withdrawal season has led to unprecedented growth in the Henry Hub complex.

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Our Energy research team has released a series of articles reviewing the fundamentals around WTI after this April’s super-contango. Topics include:

• Why Cushing Matters
• The Peaking of Storage
• Managing US Crude Exports: A Guide to WTI Houston
• Tectonic Shift in the US Domestic Crude Oil Grades Market

South America has become a major producer and exporter of agricultural products and the home to many users of our global benchmark risk management products. CME Group and B3 have combined efforts to develop a suite of South American regional products to manage risk in this region. The initial focus of the partnership will be on developing a South American soybean contract that will target international customers trading on CME Group, and then another focused on Brazilian customers trading on B3.

Key Features

• A more effective hedge for South American producers, exporters, and importers of South American soybeans ‒ as it reflects export price at the Port of Santos
• An opportunity to trade the spread between North American and South American soybeans, and effectively the South American soybean basis
• Available for screen trade on CME Globex or block trade reported via CME ClearPort. While our US-based Grain and Oilseed futures contracts are the global benchmarks for price discovery and risk management, we continue to add regional products like this to provide market participants with a full suite of risk management tools.

We expect the contracts to be available for trading during Q3 of this year.

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CME Group first listed cleared Fertilizer swaps in 2011 for Urea, UAN, and DAP. However, not all market participants could access the cleared swaps. Since June 2019, Fertilizer futures have been listed and available to improve market access.

Key features

• Financially settled against leading fertilizer price reporting agencies: Profercy and ICIS
• Low minimum block threshold of two contracts – find the Fertilizer broker directory here
• 100-ton contracts • Includes Urea US Gulf, Urea Egypt, UAN NOLA, DAP NOLA, Urea Brazil, and MAP Brazil

Source: CME Group 

Explore Fertilizer futures