The USDA Acreage report impacts old and new crop instruments differently, providing trading opportunities.

From CME Group: 2024-06-04 12:56:24

The USDA Acreage report impacts both old and new crop instruments differently, with November Soybean futures experiencing the largest one-day move. Options skew provides insight into directional risk sentiment, with 25-delta risk reversal in December Corn options suggesting more demand for upside protection. Near-term volatility in Corn options can be hedged or captured with short-dated or weekly options, such as those expiring on the day of the Acreage report. A horizontal call spread strategy can provide short-term upside exposure while managing premium costs. The Acreage report can lead to various outcomes, with long-dated calls providing potential for recovery over time. Ultimately, the CME Group’s new crop options suite allows for nuanced market participation based on the Acreage report’s release.



Read more at CME Group: Capturing Volatility from the USDA Acreage Report with New Crop Weekly Options