CME Launches Ethanol Co-Product Contract

Cindy Zimmerman

The trading of futures contracts for the ethanol co-product that is used as livestock feed officially began today on the CME Group electronic trading platform, Globex.

Distillers’ Dried Grain (DDG) futures are a physically delivered contract designed to bring price discovery and transparency to the corn crush market allowing customers to better manage their price risk in the feed, livestock, dairy, biofuels, grains and oilseed industries. In addition, DDG futures can be combined with corn and ethanol futures to establish the Corn-for-Ethanol-Crush margin.

The contract will allow ethanol producers to create a complete risk management profile through hedging both inputs (corn, natural gas) and outputs (ethanol and DDGs); otherwise known as the “corn crush”.

More information is available here.

Distillers Grains, Ethanol, Ethanol News