Dairy futures take off as CME sees record performance

The market for milk futures and options on the Chicago Mercantile Exchange (CME) has set open interest records over the past two days, reaching 7,805 positions on January 15. This month, an average of 1,000 contracts a day have far surpassed average daily volume of 410 contracts in 2002.

The CME attributes the growth both to the dairy market’s need for risk management tools, and to the liquidity the Chicago exchange provides. “With this new record in open interest for milk, overall open interest in our dairy products is more than 30,000 positions," said Terry Duffy, chairman of the exchange.

Duffy believes the market for dairy futures will continue to develop rapidly throughout 2003. "When we launched dairy futures eight years ago, we anticipated that this market would become an important part of our 'agricultural complex'.”

The CME offers various products in its so-called 'dairy complex', including options, futures and cash markets in butter, cheese and non-fat dry milk. Trading was launched in January 1996. The record performance set this week surpasses the previous record set on June 1, 2001.