“We are very proud of our historic ties to agriculture and particularly to our livestock markets,” said CME Chairman Terry Duffy. “CME live cattle futures – which, as the first contract based on a non-storable commodity, was a revolutionary concept when it launched – became our flagship product in the 1960s and 1970s and continues to serve an important role in the marketplace today.”
“The introduction of live cattle futures 40 years ago has had a significant impact on the evolution of CME,” said Chief Executive Officer Craig Donohue. “By proving non-storable commodity contracts could trade successfully, the live cattle contract helped our exchange expand beyond its original purview of storable commodities and paved the way for other innovations such as foreign-exchange currency and interest rate futures. The contract has enjoyed increased activity in recent years as commodities have emerged as a discrete asset class for institutional investors seeking to counterbalance stocks and bonds.”
Since being introduced, the live cattle futures contract has undergone changes to enhance its usefulness in risk-management programs. In 1969, for example, the 40,000-pound contract unit was introduced; in 1984, options on live cattle futures were introduced, which expanded the universe of risk-management strategies available to producers and processors; and in 1995, the carcass delivery option was added.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States. As an international marketplace, CME brings together buyers and sellers on its trading floors and CME Globex® electronic trading platform. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved approximately $1.5 billion per day in settlement payments in the first nine months of 2004 and managed $39.8 billion in collateral deposits as of September 30, 2004. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE: CME), which is part of the Russell 1000® Index.
