CME Basic Formula Price Milk Open Interest Tops 10,000

Open interest in Basic Formula Price (BFP) milk futures and options on the Chicago Mercantile Exchange (CME) surpassed 10,000 positions on August 25, including contracts on 50,000 pounds, 100,000 pounds and 200,000 pounds of milk. Total open interest totaled 10,342 on Wednesday. Open interest in individual products stood as follows: BFP milk futures (200,000 pounds) 6,002; BFP milk options (200,000 pounds) 3,822; BFP milk midi-options (100,000 pounds) 223; BFP milk mini-options (50,000 pounds) 295; Total 10,342. Both dairy producers and dairy product manufacturers and users are actively participating in the contracts. The Merc's three sizes of options on BFP milk offer producers and users both large and small with a product suited to their risk management needs. The smaller sized options can also provide greater flexibility in hedging strategies or allow for risk management of a portion of a producer's output. The CME is the world's leader in risk management for the dairy industry, offering futures and options on butter, cheese, non-fat dry milk and dry whey, in addition to BFP milk. The CME also offers cash, or "spot" trading in cheese, non-fat dry milk and butter. Barrel and block cheddar cheese and non-fat dry milk trade daily, while spot butter trades on Mondays, Wednesdays and Fridays.