CME Group to Launch Four New ‎Palm Contracts in July

The Chicago headquartered CME Group has announced that it is aiming to launch new agriculture futures ‎next month.

Chicago-based CME (NASDAQ:CME), one of the world’s paramount exchange operators, has partnered with Bursa Malaysia Derivatives and ‎Thomson Reuters to extend its suite of agricultural products by adding four new ‎palm contracts, according to a CME statement.‎

‎The new contracts broaden CME Group’s offerings within the palm derivatives complex, and will be available for trading on CME Globex, for submission for clearing through CME ‎ClearPort, and should begin trading on July 11, 2016, pending all relevant regulatory review ‎periods. Together with the Crude Palm Oil Futures contract (FCPO), the four products will provide ‎necessary hedging and risk management tools for the global commodity industry. ‎

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The holding company for CBOT, NYMEX, and COMEX exchanges launched its suite of crude palm oil ‎swaps and palm olein swaps back in 2013. Since then, more than 170,000 contracts have been ‎cleared, with record month-end closing open interest of 17,120 in May 2016 across both ‎products.‎

According to the CME announcement, the four new contracts will include the USD Malaysian ‎Crude Palm Oil Calendar futures (CPO), the USD Malaysian Palm Olein Calendar futures ‎‎(OPF), the USD Malaysian Crude Palm Oil Average Price option (POO), and the Bursa ‎Malaysia Crude Palm Oil-Gasoil Spread futures (POG).

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Reference Venues   ‎

Concerning the reference prices, the Malaysian Palm Olein Calendar futures contract will be ‎based on prices from the Thomson Reuters daily palm reference price for the palm oil ‎complex, while the new Malaysian Crude Palm Oil Calendar futures contract will reference ‎Bursa Malaysia Derivatives’ Crude Palm Oil futures contract prices.‎

The new average price option contract will be cash-settled to the average daily settlement ‎price of CPO futures, while the Bursa Malaysia Crude Palm Oil-Gasoil Spread futures contract ‎will reflect the settlements of the CPO futures and the ICE Gasoil Calendar futures.‎

Commenting in the press release, Nelson Low, Executive Director of Agricultural ‎Products at CME Group, said: “Our customers have shown increased awareness of, and interest ‎in using cleared futures on top of their traditional OTC positions in managing their risks, and ‎these four new contracts will provide them the flexibility and efficiency to manage exposure to ‎price volatility in the global palm oil market.” ‎

‎”The use of BMD’s Crude Palm Oil futures contract (FCPO) in CME Group’s new palm ‎products recognises and reinforces FCPO’s position as the global price benchmark,” said K ‎Sree Kumar, the Acting Chief Executive Officer of Bursa Malaysia Derivatives Berhad.

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