Trading in distillers' dried grain contracts (with video)
CME Group has announced the launch of Distillers' Dried Grain agricultural commodity futures contracts, scheduled to begin trading April 26.
These contracts are listed with, and subject to, the rules and regulations of the Chicago Board of Trade.
Distillers' Dried Grains, a byproduct of corn-produced ethanol, is used for animal feed, including livestock and dairy cows.
The electronically traded and physically delivered futures contracts can be used by livestock and ethanol producers, commercial corn interests and others to lock in the price of feed or to hedge their ethanol refining margin in combination with corn, natural gas and ethanol futures.
"This product will enable our feed customers to directly manage price risk of feed inputs that they haven't been able to before," said Tim Andriesen, CME Group
Managing Director for Commodities.
"Using the Distillers' Dried Grain futures, along with our corn, natural gas and ethanol contracts, also allows real margin management for participants in the fast-growing ethanol sector, once again highlighting the synergies of the CME Group product suite."
Each contract is equivalent to 100 short tons of Distillers' Dried Grains. Deliverable grades must include a minimum of 26% protein and 8% fat as well a maximum of 12% fibre content and 11.5% moisture content.
Learn more about hedging from this video:
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