CME Group to launch cheese futures

by Ron Sterk
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CHICAGO — The CME Group plans a June 20 launch of cash settled cheese futures and options on CME Globex, the exchange’s electronic trading platform.

“This contract was requested by our customers such as manufacturers and processors of cheese to better fit the needs of their risk profile,” Tim Andriesen, CME Group managing director of agricultural commodities, said. “Many of these customers already participate in our class III milk and dry whey futures and options markets. The new cheese contracts will enable them to directly lock in future prices for cheese.”

The new cheese contracts will be listed monthly. Each contract will represent the equivalent of 20,000 lbs of cheese with a tick size of $0.001 per lb. Trading hours will be Sunday through Thursday, 5:00 p.m. to 4:00 p.m. Central Time, and Friday until 1:55 p.m., with daily trading halts from 4:00 p.m. to 5:00 p.m. The first day of trading on June 20 is for trade date June 21, the CME Group said.

“The cheese futures will complete the ‘dairy crush’ with which the original commodity as well as its product and byproducts can be hedged,” the CME Group said. Cheese is made from class III milk and whey is a byproduct of the cheese making process. The exchange has offered class III milk futures and options since 1996 and listed dry whey futures and options in 2007.

The CME Group also already offers futures and options on class IV milk, international skimmed milk, nonfat dry milk and butter. Spot call markets are offered for nonfat dry milk, butter and cheddar cheese barrels and blocks.

The CME Group comprises the former Chicago Mercantile Exchange and Chicago Board of Trade and other markets.
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