AFTER a year of uncertainty related to confidence-rattling scandals, the volume of agricultural futures and options contracts traded in the U.S. market appeared to be recovering during the first three months of 2013.
Although volumes were not up across the board, trade in winter wheat futures contracts grew significantly from prior-year levels.
On a percentage basis, the largest increase in March trading volume was for Kansas City Board of Trade (KCBT) hard red winter wheat futures and options. With an average daily volume (ADV) of 24,579 contracts, trade in KCBT contracts grew 24% from March 2012.
The growth in hard red winter wheat trade was not entirely unexpected as analysts had largely assumed that the integration of KCBT into CME Group's operations would spark additional interest in the product line. CME completed its acquisition of KCBT last December and announced in February that integration into CME's clearing system would commence April 15, with physical integration of pit trading into the Chicago, Ill., trading floor set for June 28 (Feedstuffs, Feb. 11).
Hard red spring wheat contracts also saw increased trading interest in March, with total volume up 14% from a year ago on the Minneapolis Grain Exchange. March was the sixth consecutive month of year-over-year volume growth for the exchange, with total trading volume recorded at 92,576 contracts, with hard red spring wheat products making up 99.75% of those contracts.
Aside from the hard red wheat issues, trading of agricultural commodities was down from March 2012. CME said its agricultural commodity volume last month averaged 969,000 contracts per day, off 13% from the prior year. CME's total ADV was relatively flat year over year, at 12.5 million contracts.
Agricultural contracts comprised 7.8% of CME's ADV in March; for the 2013 first quarter, ADV was off 3% from the first quarter of 2012, at 1.08 million contracts traded. The exchange reported record volume in live cattle contracts for the quarter.
In addition, CME saw record quarterly volume in several currency and treasury issues, as well as record open interest for its suite of foreign exchange products. Henry Hub natural gas futures set nine consecutive open interest records during the month of March.
While CME's agricultural contracts overall saw lighter trading in March, on a rolling three-month average, volume has increased for four consecutive months: from 962,000 contracts per day for the period ending December 2012 to 1.08 million for the quarter ending March 2013.
CME noted that 88% of the 249 million contracts traded across its product lines in March were traded electronically.