Class III milk is used to manufacture cheese; futures on this product began trading in January 1996. Class IV milk is used to manufacture butter and nonfat dry milk; futures on this product launched in July 2000. The previous open interest records were set on Feb. 2 for Class III milk futures, with 9,550 positions, and on Feb. 1 for Class IV milk futures, with 1,959 positions.
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. The open interest record in Class III milk represents more than 2 billion pounds of milk, and is a key liquidity indicator that growing numbers of participants are finding the market useful in their risk management strategies.
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, nonfat dry milk, 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. On Nov. 13, 2000, CME finalized its transformation into a for-profit, shareholder-owned corporation as it became the first U.S. financial exchange to demutualize by converting its membership interests into shares of common stock that can trade separately from exchange trading privileges. The exchange moves about $1 billion per day in settlement payments, manages $25 billion in collateral deposits and administers more than $1 billion of letters of credit.
