Market Matters Blog

Record Trading Volumes in Ag

Tuesday, June 30, 2015 set records.

CME Group's agricultural futures and option products did record volume: 2.87 million trades. It was the largest volume day since... last Friday (June 26).

Combined corn futures and options volume: 1.12 million

Corn futures only: 845,700

Combined soybean futures and options: 722,777

Soybean futures only: 503,063

Cash bushels traded electronically on DTN Portal: 16.7 million bushels, which was more than double the previous record set Thursday, June 25. Overall, 54.8 million bushels traded during June.*

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DTN analyst Todd Hultman said excessive rainfall cast doubt on yield potential, and then USDA's Grain Stocks showed smaller supplies of both corn and beans than the market expected.

"Anytime you get a surprise that alters the prevailing view of the markets, there is a lot of running for the doors," DTN analyst Todd Hultman said. "The June 30 reports are notorious for such surprises and Tuesday’s numbers refuted a lot of early fundamental biases about this year’s balance sheets for corn and beans."

DTN Senior Analyst Darin Newsom agrees, and adds that noncommercial traders held a large net short position going into Tuesday's reports. "Buy orders were running amok, particularly in the last half hour of trade when even wheat was goosed to a higher than expected close."

Commercial traders may have been involved in the action for part of the day, "but as overnight basis and today’s action showed, they may have moved to the sidelines.

"It doesn’t change this group’s long-term outlook though: Still bullish soybeans, neutral corn, and increasingly bullish (but easily changed) toward wheat."

*More than 45,000 farmers have made offers to sell grain to their local elevators through DTN Portal or Farms Technology DPP Grain Desk. The two programs teamed up in 2014 to maximize their strengths, and the popularity is growing.

In the first five months of 2015, more than 150 million bushels had been offered through Portal, up 40 million bushels during the same time frame the previous year, according to DTN agribusiness product manager Don Konz. More than 1.3 billion bushels have been offered for sale on Portal since it went live in 2007.

In early June, DTN Portal launched branded apps for CHS, Valero Renewables and Green Plains Grain that allow farmers to make offers to any of those companies' locations.

For farmers, DTN Portal is way to make, manage and monitor their offers to their preferred locations. For the elevators, Portal offers a comprehensive grain management platform that lets merchandisers accept offers, automatically hedge their purchases and view their entire position in real time, all while integrating with most accounting systems.

Konz argues that offers are the best way to judge how widely electronic cash markets are being adopted. How many bushels that actually trade through the platform, like Tuesday's 16.7 million bushel record, largely depends on market conditions -- like this 60-cent corn market rally.

(AG/ES)

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