CME Lean Hog Volume Hits New Daily High

Volume in futures on lean hogs traded at the Chicago Mercantile Exchange (CME) set a new record yesterday of 17,529. The previous record was set on December 14, 1998, with 17,435 contracts traded. Average daily volume is 9,763 year-to-date. Each lean hog contract represents 40,000 pounds of 170 to 191 pound dressed hogs and are 51 percent to 52 percent lean. The CME introduced the successful lean hog contract in 1995 in response to customer demand to have a contract that better reflected the prices that producers get for their animals. "The CME lean hog contract helps to facilitate risk management for producers during uncertain market conditions," said Terrence Duffy, Vice Chairman of the CME Board and member of the Lean Hogs Committee. "Our contract has functioned extremely well during this time of immense volatility." The lean hog contract is cash-settled to the CME Lean Hog IndexTM, a two-day weighted average of USDA Lean Value Direct Hog Trade prices from the major hog producing regions in the United States. The settlement index is calculated on the business day following the last day of trading. The Chicago Mercantile Exchange offers a variety of futures and options products on livestock, dairy and forest products. As part of its agricultural complex, the CME trades contracts on live cattle, feeder cattle, stocker cattle, boneless beef and beef trimmings, lean hogs, pork bellies, pork cut-out, BFP milk, butter, cheddar cheese, nonfat dry milk, dry whey, lumber and oriented strand board.