CME’s futures and options on Class III milk – used to manufacture cheese –began trading in January 1996. In addition, CME’s Class IV milk futures set open interest records for the past four consecutive sessions, beginning with 2,382 positions on April 27, and reaching 2,470 on May 2. Class IV milk is used to manufacture butter and nonfat dry milk; futures on this product launched in July 2000. Each contract represents 200,000 pounds of milk.
Open interest is the number of futures and options contracts outstanding at the close of trading each day. Open interest is a measure of the use of risk management instruments by institutions and individuals with a long-term stake in the markets, as well as the liquidity of a contract.
Chicago Mercantile Exchange Inc. offers a variety of futures and options products on livestock, dairy and forest products. As part of its agricultural complex, CME trades contracts on live cattle, feeder cattle, stocker cattle, lean hogs, pork bellies, milk, butter, cheddar cheese, dry whey, lumber and oriented strand board. To complement the dairy futures markets, CME also conducts daily spot trading of cheese blocks and barrels along with nonfat dry milk. Spot butter trades every Monday, Wednesday and Friday.
Chicago Mercantile Exchange Inc. (www.cme.com) is an international marketplace that brings together buyers and sellers on its trading floors and GLOBEX®2 around-the-clock electronic trading system. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign currencies and agricultural commodities. All over the world, pension funds and investment advisers, portfolio managers, corporate treasurers, commercial and investment banks, broker/dealers and individuals are among those who trade on CME as an integral part of their financial management strategy. In 2000, more than 231 million contracts with an underlying value of more than $155 trillion changed hands at CME. The exchange moves about $1 billion per day in settlement payments, manages $30 billion in collateral deposits and administers more than $1 billion of letters of credit.