In the USA, the farmers grow about half the world's supply of soyabeans, which is a leading dollar-earner among the country's agricultural exports. It is therefore, important that price stability becomes essential for those businesses that rely on soybeans for their manufacturing process. As a result, soybean prices can vary substantially from day to day. This calls for managing the emerging risks, apart from offering opportunities. The Chicago Board of Trade (CBoT) and the Mid-America Commodity Exchange provide two vital economic functions for the market-place-risk transfer and price discovery. In 1998, CBoT and MidAm options contracts expanded to include serial contracts. These short-term options fill in the months not in the regular commodity cycle, providing year-round risk management and trading apportunities.The trading hours on CBoT are from 9.30 am to 1.15 pm, while it is till 1.45 pm on MidAm. Trading during these hours is through open outcry. In addition, CBoT has a facility of trading throughits exclusive Project A mechanism, wherein online facility is available till 4.30 pm, including Sundays and Thursdays.
On CBoT, there are six contracts specs (two -- futures and options -- for each, soybeans, soyabean oil and soyabean meal. The size of soyabean futures is 5,000 bushels (of 60 lb each), that for soybean oil is 60,000 lb and 100 tonnes for soymeal. The soybean options is one for CBoT soybean futures, the soybean oil for one CBOT soybean oil futures and one CBoT soybean meal futures. The contract months for soyabeans futures and options are: January, March, May, July, August, September and November. For soyabean oil, October and December replace November and serial contracts for soyabeans. The others contract months are identical.
The MidAm Exchange offers five contract specs: Futures and options in soyabeans and soyaoil each, and only futures in soyabean meal. The contract size for soyabeans futures is 1,000 bushels and one MidAm soyabean and soyabean oil futures for options. The size ofsoyabean meal futures is 50 tonnes. The contract months are identical with that of CBOT.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
Printer-friendly page
