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AN INSIGHT
TO DAY TRADING

TOP 3 AGRICULTURAL FUTURES


Agricultural futures mark the origin of futures trading. In 1730, Japan established the first futures trading exchange for the purpose of trading rice futures followed by the United States and England. In the course of time, agricultural markets have continuously developed and became increasingly complex. Not only farmers, ranchers and processors but also distributors, packagers, wholesalers and retailers have an impact on the markets and are seeking planning security with regards to the commodity price.


Next to efficient price building in the markets, liquidity is another main benefit of agricultural futures. It allows market participants to enter and exit their futures contracts immediately at the best available price.


Today, the CBOT maintains the largest volume with regards to agricultural futures. Soybeans, corn and wheat represent the futures contracts with the highest volume in the agricultural segment.


SOYBEANS

The U.S. Department of Agriculture has published a research reporting the United States have developed to the largest producer and exporter of soybeans mainly delivering to China, EU and Japan. Soybeans represent 90% of all oilseed production in the United States accounting for 28.4% of the global soybean export in 2019 and 35% of the global soybean production in 2018. In the United States, soybeans are the most planted crop with over 76.1 million acres planted in 2019 whereof 81% is concentrated in the Upper Midwest. The soybean planting season starts in late spring and is harvest begins early autumn. Further, soybeans were among the first bioengineered crops achieving commercial success while making up the largest portion of biotech crops in the United States.


The research website Our World in Data, categorises the global soybean production into three categories whereof animal feed (77%) represent the largest part, followed by direct human food (19.2%) and industry (3.8%). Demand for processed soy has grown significantly from 1990 with 88 million tons 227 million tons in 2013. Those numbers are particularly driven by an increased demand in animal feed, biofuels and vegetable oil.


Today, soybeans futures are the most traded agricultural futures with an average daily volume of 200,000 contracts.

Soybean Futures Contract Specifications

Contract Unit

5,000 bushels (~136 metric tons)

Price Quotation

U.S. cents per bushel

Trading Hours

​Sunday – Friday 7:00 p.m. – 7:45 a.m. CT and Monday – Friday 8:30 a.m. – 1:20 p.m. CT

Minimum Price Fluctuation

​1/4 of one cent (0.0025) per bushel = $12.50

Product Code

ZS

Listed Contracts

Jan, Mar, May, Jul, Aug, Sep & Nov

Settlement Method

Deliverable

Last Trading Date

Business day prior to the 15th day of the contract month.

​Last Delivery Date

Second business day following the last trading day of the delivery month.

​Settlement Procedures

Exchange

  • CBOT



CORN

According to the U.S. Department of Agriculture, more than 90 million acres of land in the United States are allocated to corn accounting for more than 95% of the total feed grain production. World of Corn published supplementary data stating 38.7% of the corn production are used for feed & residual, 34% for ethanol, 9.8% account for other purposes like sweeteners, starch or beverages and 17.5% of the corn production exported to other countries. Therewith, the Unites States represent a major market participant in in the global corn trade market. The planting season starts in spring and ends in the autumn. Although corn is grown in nearly all 50 states, the production is concentrated in the north and mid-west with Iowa and Illinois being the top corn-producing states.


Corn futures are traded on the Chicago Board of Trade (CBOT) and represent the most liquid and active market in grains, with an average of 350,000 contracts traded per day.

Corn Futures Contract Specifications

Contract Unit

5,000 bushels

Price Quotation

U.S. cents per bushel

Trading Hours

Sunday – Friday, 7:00 p.m. – 7:45 a.m. CT and

Monday – Friday, 8:30 a.m. – 1:20 p.m. CT

Minimum Price Fluctuation

1/4 of one cent (0.0025) per bushel = $12.50

Product Code

ZC

Listed Contracts

Mar, May, Sep, Jul & Dec

Settlement Method

Deliverable

Last Trading Date

Business day prior to the 15th day of the contract month.

​Last Delivery Date

Second business day following the last trading day of the delivery month.

​Settlement Procedures

Exchange

CBOT



WHEAT

The U.S. Department of Agriculture has published a research reporting wheat ranks third among the field crops in the United States – right behind soybeans and corn. Having its peak in 1981, the wheat planted area dropped off by more than 40 million acres in the following year while illustrating a decrease in production by nearly 1.1 billion bushels. Although the United States produces only about 6-7% of the global wheat, it is still a major wheat exporting country.


Demand for wheat flour is relatively stable and largely unaffected by changes in wheat price or disposable income. However, wheat consumption in the United States is closely tied to population and consumer preferences. The continuous growth in consumption with a peak at 225 pounds per capita came to an end when consumers changed their preferences predominantly led by the adoption of low-carbohydrate diets in the mid 90’s. The trend continued the following years due to the increasing popularity of related diets and further trend for gluten-free foods coming up in 2008. As a result, the consumption per capita had decreased to 131 pounds in the United States by 2019.


The wheat production in the United States is classified into five major classes, whereof hard red winter and hard red spring account for 60% of the production, soft red winter represents 23%, white 15% and durum 2% as published by the AgMRC. Having a range of different wheat species available, the crop can be planted and harvested throughout the year.

SRW WHEAT FUTURES CONTRACT SPECS

​Contract Unit

5,000 bushels (~ 136 metric tons)

Price Quotation

U.S. cents per bushel

Trading Hours

Sunday – Friday: 7:00 p.m. – 7:45 a.m. CT and

Monday – Friday: 8:30 a.m. – 1:20 p.m. CT

Minimum Price Fluctuation

1/4 of one cent (0.0025) per bushel = $12.50

Product Code

ZW

Listed Contracts

Mar, May, Jul, Sep, Dec

Settlement Method

Deliverable

Last Trading Date

Business day prior to the 15th day of the contract month.

​Last Delivery Date

Second business day following the last trading day of the delivery month.

​Settlement Procedures

Exchange

CBOT