Tag Archives: CME

Uncertainty looms behind a weakened Purdue University/CME Group Ag Economy Barometer reading in February, with producers less optimistic about current conditions and the commodity price outlook. The barometer, which is based on a survey of 400 U.S. agricultural producers, declined 7 points to a reading of 136, down from 143 in January.

“Last month we saw a significant boost in optimism among agricultural producers after the announcement of the second round of MPF payments; however, it appears the positive impact eroded quickly,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Compared to responses from a year ago, fewer farms said they expect their operation to grow in the future, which could be a sign of increasing financial stress. We’re also seeing a growing number of farms concerned about marketing risk, ranking it as the biggest risk facing their operations.”

The monthly survey includes measures of producer sentiment toward current conditions and future expectations. In February, both indexes declined from their January reading. The Index of Current Conditions saw the biggest drop, down from 132 to 119, whereas the Index of Future Expectations weakened slightly, down from 148 to 145.

Last summer, the tariff battle disrupted commodity markets and, as a result, producers’ perspective on whether now is a “good” time or a “bad” time to make large farm investments has significantly fluctuated. From January 2018 through June 2018, before the trade disruptions emerged as a major market factor, the Large Farm Investment index averaged a reading of 65. However, since that time, the index has had an average reading of 53 points and, in February 2019 alone, the index fell to a reading of 50, down 12 points from January, as uncertainty about commodity prices continues to make farmers wary of large investments in their operations.

Additionally, when producers were asked whether they have plans to grow or increase the size of their current operation in 2019, 50 percent of respondents said that they either “have no plans to grow” or “plan to reduce in size,” compared to 39 percent in 2018. Last month, when 25 percent of farmers surveyed indicated they expected to take out a larger operating loan in 2018 versus 2019, a follow-up question found that 27 percent of those farms were taking out larger loans due to unpaid operating debt carryover, suggesting they were experiencing financial stress.

In February, producers were slightly more optimistic about evaluating farmland as a long-term investment and the future growth of agricultural exports; yet, they remain concerned about risk. When asked what type of risk was most critical to their farming operation, producers overwhelmingly chose marketing risk (56 percent) over both financial (27 percent) and production (17 percent) risk, which explains their uncertainty regarding the commodity price outlook.

Read the full February Ag Economy Barometer report at http://purdue.edu/agbarometer. In this month’s report, we continue to follow up with producers who planted soybeans in 2018 on their soybean acreage intentions for 2019 and ask producers, who planted corn in 2018, whether they plan to use one of the commodity support programs when sign-up becomes available. Each month Dr. Mintert also provides an in-depth analysis of the barometer. That video can be viewed at http://purdue.ag/barometervideo.

The Ag Economy Barometer, Index of Current Conditions and Index of Future Expectations are available on the Bloomberg Terminal under the following ticker symbols: AGECBARO, AGECCURC and AGECFTEX.

CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 19 million contracts in February 2019. This is up 7 percent from January 2019, but down from a record 27.3 million contracts per day in February 2018. Open interest (OI) at the end of February was 126 million contracts, up 3 percent from January 2019, but down 3 percent from February 2018.

Agricultural volume averaged 1.7 million contracts per day in February 2019, down 13 percent from February 2018. Highlights include:

  • Livestock electronic futures ADV increased 4 percent to 125,000 contracts
  • Corn options ADV grew 32 percent to 100,000 contracts
  • Lean Hog futures and options ADV rose 8 percent to 64,000 contracts
  • Live Cattle futures ADV grew 6 percent to 60,000 contracts
  • Wheat options ADV rose 23 percent to 45,000 contracts

Energy volume averaged 2.3 million contracts per day in February 2019, down 17 percent from February 2018. Highlights include:

  • Record WTI Houston Crude Oil futures OI of 5,900 contracts on February 19 and record daily volume of 4,800 contracts on February 20

Metals volume averaged 525,000 contracts per day in February 2019, down 24 percent from February 2018. Highlights include:

  • Record Copper options OI of 57,000 contracts on February 22 and record daily volume of 12,500 contracts on February 20
  • Platinum futures and options ADV increased 11 percent to 20,500 contracts
  • Copper options ADV more than tripled to 3,700 contracts

Foreign Exchange volume averaged 762,000 contracts per day in February 2019, down 30 percent from February 2018. Highlights include:

  • Record Offshore Chinese renminbi futures daily volume of 5,800 contracts on February 11

Interest Rate volume averaged 11 million contracts per day in February 2019, down 30 percent from February 2018. Highlights include:

  • Record SOFR futures OI of 125,000 contracts and record daily volume of 61,200 contracts on February 28
  • 2-Year U.S. Treasury Note futures ADV increased 6 percent to a record 1.1 million contracts, following the tick size reduction in January
  • SOFR futures ADV increased 70 percent to a record 31,200 contracts, compared to last month
  • SONIA futures ADV rose 40 percent to 8,600 contracts, compared to January 2019
  • 5-Year U.S. Treasury Note Wednesday Weekly options ADV grew 16 percent to 6,000 contracts

Options volume averaged 3.5 million contracts per day in February 2019, down 42 percent from February 2018.

Equity Index volume averaged 2.7 million contracts per day in February 2019, down 45 percent from February 2018. Highlights include:

  • S&P 500 Total Return Index futures and options ADV grew 83 percent year-over-year to 2,200 contracts

CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 17.8 million contracts per day in January 2019, down 6 percent from January 2018. Open interest at the end of January was 122 million contracts, down 1 percent from January 2018 and up 5 percent from year-end 2018.

Equity Index volume averaged 3.3 million contracts per day in January 2019, up 7 percent from January 2018. Highlights include:

  • E-mini S&P 500 futures ADV increased 17 percent to 1.6 million contracts
  • E-mini Nasdaq-100 futures and options ADV grew 51 percent to 530,000 contracts
  • E-mini Dow futures and options ADV rose 35 percent to 234,000 contracts
  • E-mini Russell 2000 futures and options ADV grew 29 percent to 139,000 contracts
  • E-mini S&P Select Sector Index futures and options ADV increased 53 percent to 10,000 contracts
  • S&P 500 Wednesday Weekly options ADV rose 56 percent to 4,000 contracts

Interest Rate volume averaged 9.6 million contracts per day in January 2019, down 1 percent from January 2018. Highlights include:

  • U.S. Treasury futures and options ADV increased 4 percent to 4.6 million contracts, including U.S. Treasury futures ADV, up 5 percent to 3.6 million contracts, and U.S. Treasury options ADV, up 2 percent to 959,000 contracts
  • 2-year U.S. Treasury Note futures ADV increased 23 percent to 483,000 contracts
  • Fed Fund futures ADV rose 61 percent to 314,000 contracts
  • Weekly Treasury options ADV grew 21 percent to 170,000 contracts
  • Ultra 10-year U.S. Treasury Note futures and options ADV grew 1 percent to 152,000 contracts
  • Ultra U.S. Treasury Bond futures and options ADV increased 3 percent to 135,000 contracts
  • SOFR futures ADV grew to 18,400 contracts, the highest since their May 2018 launch

Options volume averaged 4 million contracts per day in January 2019, down 12 percent from January 2018. Highlights include:

  • Metals options ADV increased 9 percent to 62,000 contracts

Agricultural volume averaged 1.1 million contracts per day in January 2019, down 15 percent from January 2018. Highlights include:

  • Livestock futures ADV grew 11 percent to 144,000 contracts
  • Live Cattle futures and options ADV increased 4 percent to 87,000 contracts
  • Lean Hog futures and options ADV rose 20 percent to 65,000 contracts

Energy volume averaged 2.5 million contracts per day in January 2019, down 20 percent from January 2018. Highlights include:

  • Record WTI Houston Crude Oil futures daily volume of 2,232 contracts on January 31
  • WTI Houston Crude Oil futures ADV grew to 1,000 contracts, the highest since their November 2018 launch

Foreign Exchange volume averaged 838,000 contracts per day in January 2019, down 23 percent from January 2018. Highlights include:

  • Russian ruble futures and options ADV grew 120 percent to 2,800 contracts
  • South African rand futures and options ADV rose 4 percent to 2,000 contracts

Metals volume averaged 564,000 contracts per day in January 2019, down 26 percent from January 2018. Highlights include:

  • Record Copper options ADV, up 152 percent to 2,400 contracts
  • Precious Metals options grew 7 percent to 59,000 contracts
  • Gold options ADV increased 8 percent to 51,000 contracts
  • Silver options ADV rose 2 percent to 7,700 contracts
  • Palladium futures and options increased 6 percent to 5,200 contracts

BrokerTec fixed income and EBS foreign exchange trading activity highlights, in terms of average daily notional value, include:

  • European Repo average daily notional value increased 6 percent to €257.6 billion
  • U.S. Repo average daily notional value increased 4 percent to $261.3 billion
  • U.S. Treasury average daily notional value decreased 1 percent to $183.5 billion
  • Spot FX average daily notional value decreased 17 percent to $87.1 billion