CME Celebrates 40th Anniversary of Lean Hog Contract
CHICAGO - CME, the world's largest and most diverse financial exchange, today announced that it is celebrating the fortieth anniversary of its lean hog futures contract this month.
2 May 2006
4 minute read
An important indicator of grocery store prices for items such as pork chops, ribs and pork loin, annual contract volume has grown from just over 8,000 contracts since its launch in 1966 to more than two million contracts in 2005.
The CME lean hog contract has evolved since its inception from a contract of physically delivered live hogs into a cash settlement-only contract of lean hog carcasses, which makes this a more viable hedging tool for international producers and pork importers and/or exporters. The contract began to trade on the CME Globex(R) electronic trading platform in 2002.
"We are very proud of our historic ties to commodities, particularly to our lean hog contract, which applied the same risk management tools used in other livestock contracts to hogs where price movements have always been greater," said CME Chairman Terry Duffy. "The CME lean hog futures contract became the established marketplace to hedge price risk."
"This contract is another example how CME leads the way in innovating traditional risk management products and adapting them to fit the hedging needs of the financial marketplace," said CME Chief Executive Officer Craig Donohue. "CME first changed the delivery of lean hogs to cash settlement from physical delivery to make the product more accessible to global users. Trading on CME Globex has broadened distribution of this contract and helped to increase volumes."
Record single day volume for lean hogs reached 67,314 contracts on January 12, 2006. Average daily volume in April 2006 was 17,903 compared to 13,706 in April 2005. The average daily notional value of all lean hog contracts traded in April 2006 was more than $474 million.
Chicago Mercantile Exchange Inc. ( http://www.cme.com ) is the world's largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on CME Globex electronic trading platform and on its trading floors. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.4 billion per day in settlement payments in 2005 and managed $45.8 billion in collateral deposits at December 30, 2005, including $3.2 billion in deposits for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME), which is part of the Russell 1000(R) Index.
Statements in this news release that are not historical facts are forward- looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which can be obtained at its Web site at http://www.sec.gov . We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
ThePigSite News Desk
The CME lean hog contract has evolved since its inception from a contract of physically delivered live hogs into a cash settlement-only contract of lean hog carcasses, which makes this a more viable hedging tool for international producers and pork importers and/or exporters. The contract began to trade on the CME Globex(R) electronic trading platform in 2002.
"We are very proud of our historic ties to commodities, particularly to our lean hog contract, which applied the same risk management tools used in other livestock contracts to hogs where price movements have always been greater," said CME Chairman Terry Duffy. "The CME lean hog futures contract became the established marketplace to hedge price risk."
"This contract is another example how CME leads the way in innovating traditional risk management products and adapting them to fit the hedging needs of the financial marketplace," said CME Chief Executive Officer Craig Donohue. "CME first changed the delivery of lean hogs to cash settlement from physical delivery to make the product more accessible to global users. Trading on CME Globex has broadened distribution of this contract and helped to increase volumes."
Record single day volume for lean hogs reached 67,314 contracts on January 12, 2006. Average daily volume in April 2006 was 17,903 compared to 13,706 in April 2005. The average daily notional value of all lean hog contracts traded in April 2006 was more than $474 million.
Chicago Mercantile Exchange Inc. ( http://www.cme.com ) is the world's largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on CME Globex electronic trading platform and on its trading floors. CME offers futures and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moved about $1.4 billion per day in settlement payments in 2005 and managed $45.8 billion in collateral deposits at December 30, 2005, including $3.2 billion in deposits for non-CME products. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, Nasdaq: CME), which is part of the Russell 1000(R) Index.
Statements in this news release that are not historical facts are forward- looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q, which can be obtained at its Web site at http://www.sec.gov . We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
ThePigSite News Desk
