Impact of Changing Weather Patterns Drives Strong Demand for ICE’s Global Soft Commodity Markets

Intercontinental Exchange, a global provider of market data, has reported strong performance in the soft commodities market in the first half of the year. The company’s Soft commodity portfolio, including Sugar, Cocoa, Coffee, Cotton, Canola, and Frozen Concentrated Orange Juice, has seen a 22% increase in volumes compared to the previous year. Open interest (OI) has also risen by 19% to reach 4.2 million contracts. Sugar volumes have increased by 30%, Coffee volumes by 10%, Cocoa volumes by 17%, and Cotton volumes by 10%.

The Options markets for soft commodities have shown particularly strong growth, with OI across the portfolio increasing by 22% to 1.9 million contracts. Customers are increasingly using ICE’s Calendar Spread Options products to manage spread volatility between futures contract months. Sugar Options OI has risen by 23%, and Cocoa Options OI has surged by 62% to reach 669,000 contracts.

The rising prices of cocoa have led to a record number of Cocoa futures and options trading in the first half of 2023. The volume and OI of Cocoa contracts reached a record high of 1.4 million contracts on June 29, 2023. Cocoa OI has increased by 36% across futures and options. Participation in ICE’s New York and London Cocoa contracts is also at its highest since 2018, with record participation in ICE’s London Cocoa markets in June.

Canola, used to hedge the price of canola seed (Rapeseed), has also seen record trading activity, with 4.4 million Canola futures and options trading in the first half of the year, surpassing the previous record set in 2016. ICE’s markets play a crucial role in determining the global benchmark price for Canola, and Canadian Canola exports represent a significant portion of global Canola/Rapeseed exports.

ICE’s soft commodities markets are part of its broader global energy and commodity markets, which include benchmarks like Brent Crude Oil, TTF natural gas, and European carbon allowances. Overall, open interest across ICE’s commodity markets has increased by 12% to 52.6 million contracts, with average daily volume up 7% to 3.9 million contracts.

David Farrell, Chief Operating Officer at ICE Futures U.S., highlighted the role of commodity derivative markets in enabling producers and consumers to manage price risk for over a century. With the emergence of new weather patterns and evolving fundamentals, market participants rely on ICE’s highly liquid markets to effectively manage price exposure for these essential commodities that play a central role in our daily lives.

Orange Juice Long (Buy)
Enter At: 273.80
T.P_1: 280.55
T.P_2: 292.25
T.P_3: 303.35
T.P_4: 315.20
T.P_5: 324.10
T.P_6: 335.95
T.P_7: 344.95
T.P_8: 357.75
T.P_9: 371.45
T.P_10: 386.95
S.L: 253.20

Orange Juice
Orange Juice

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