March 2025 Commodities Update

Since his inauguration on January 20, President Donald Trump has regularly made headlines for his international trade policy moves. These fluctuating tariff policies have added volatility to commodity markets, as traders strategize how to navigate uncertainty. 

On Monday, March 10, Beijing implemented tariffs on multiple farm products from the U.S. Facing a 15% tariff includes chicken, wheat and corn, while soybeans, pork, beef and fruit face a 10% tariff. China is the largest overseas market for American agricultural products. As policy continues to develop, or‌ stays the same, traders can use Ag Weekly options to insulate their portfolios from uncertainty, now available every day of the trading week. Ag Weekly options hit a record in early March, with 3,730 contracts trading on March 5.

Canada planned to retaliate against President Trump’s 25% tariff on Canadian exports in early March. Ontario was looking to impose a 25% surcharge on energy exports to Michigan, Minnesota and New York. President Trump then moved to increase Canada's initial metals tariff to 50%, but both countries revoked these additional tariffs. To navigate world events, such as tariffs, traders continue to look to Weekly Energy options. WTI Weekly Energy options ADV in March is up 17.8% compared to February 2025, with an average of 24,222 contracts traded in March to February’s 20,562 contracts.

The Trump administration also placed a 25% tariff on all steel and aluminum imports to the U.S. in early March, which also applies to certain products such as nails, wires and car body and bumper stampings. The steel and aluminum tariffs of President Trump’s first term were subject to a product exclusion application process; this exemption process does not exist for the updated steel and aluminum tariffs. Metals traders can turn to Metals Weekly options to hedge risk that may come with volatility in the markets.

It’s been a record month (and some change) for Henry Hub. Natural gas prices rose to their highest level in two years as severe weather continues to drive demand and decrease storage levels. These dynamics have fueled volatility, with traders turning to Henry Hub Natural Gas futures and options, the global benchmark for natural gas, to hedge their exposure. 

While February 2025 set a new all-time natural gas ADV record, with over 1.1M contracts traded, March is proving to stay ahead of the pipeline. March 6 marked a massive day in natural gas, featuring an all-time single-day volume record for Henry Hub Natural Gas (ON) options, with 567K contracts traded, including 382K traded on-screen, and nearly 900 unique options strategies traded on-screen, with 30 strategies over 1K lots. March 6 also ranked in the top five all-time Natural Gas (NG) futures volume day at 1,233,995 lots traded. 

Recent natural gas price volatility emphasizes the need to quickly capitalize on or hedge short-term price moves. We've added Monday through Thursday expirations to existing Friday Natural Gas Weekly options, making us the most liquid market for Natural Gas Weekly options.

Traders are executing options strategies on CME Direct, the top trading platform for Energy options volume, and home to the only liquid screen market for Natural Gas (ON) options.

CME Direct offers professional traders access to unparalleled options liquidity alongside advanced functionality and analytics. Seamlessly execute Request for Quote (RFQ) strategies, create a tailored, enhanced options trading grid and view live market activity all on a single screen. With Vertical Trader, view full market depth in a ladder format, enter orders with a single click, place market orders and manage multiple bids/offers for any given contract.

In recent years, Soybean Oil (ZL) futures and other vegetable oil market prices have experienced significant strength, affecting the price relationship between soybean oil and soybean meal. Soybean oilshare is used to describe soybean oil prices relative to soybean meal prices. On March 31,* market participants will be able to trade the relative value of soybean oil to soybean meal using our cash-settled Soybean Oilshare (OSF) futures and options contracts.

Available March 31,* manage your lumber risk and capitalize on trading and diversification opportunities with cash-settled Southern Yellow Pine (SYP) futures and options. These contracts offer a cost-effective way to hedge or gain exposure to one of the most commonly produced lumber species in the U.S.

Gold markets are on a tear and one of the best-performing asset classes so far this year, with the active month Gold (GC) futures contract surpassing $3,000 for the first time ever this March, up over 10% YTD as of March 14 as geopolitics and economic uncertainty fuel demand for safe-haven assets. 

Gold first crossed the $1,000/tr.oz. threshold in 2008, when the Great Financial Crisis was in full swing. Twelve years later, gold hit the $2,000/tr.oz mark as the start of Covid-19 began. It has now taken gold only five years to cross the next big round number at $3,000. Related to its role as a safe-haven asset and portfolio diversifier, central banks have been fueling the gold rally with physical purchases of over 1,000 tons of the metal in 2024.

Cobalt (CO) and Lithium (LTH) derivatives markets are off to a strong start in 2025, with Lithium Hydroxide futures registering an ADV of 591 tons YTD 2025 versus 361 tons the prior year (+64%) and a record-high OI. Cobalt has also had an eventful year so far, with the Democratic Republic of Congo’s (DRC) export ban leading to an upwards move in cobalt prices and much activity across the entire forward curve. Volumes have been strong with an ADV of 285 tons YTD 2025 versus 114 tons last year (+150%).