The CME Group Inc, who oversees corn, soybeans, soft red wheat, and other agricultural commodities futures trading, expanded their trading hours, on Sunday May 20th. The initial reason for the change is because another competing exchange – IntercontinentalExchange Inc. (ICE) recently offered corn, soybeans, and wheat futures contracts with longer trading hours than those found at CME Group. Both the Kansas City Board of Trade and Minneapolis Grain Exchange plan on following the path of ICE and CME Group through additional trading hours. Trading hours for CME Group corn, soybeans, and wheat futures contracts will now encompass 21 hours of the day, up four hours from the traditional 17 hours. The four hour expansion impacts only electronic trading, not open outcry trading. Electronic trading will begin at 5 PM and run through 2 PM the following day, Sunday through Friday, Central time. Open outcry will keep their traditional hours from 9:30 AM to 1:15 PM, Monday through Friday, Central time. Trading will be closed for three hours from 2 PM to 5 PM.
Does electronic vs. open outcry trading matter? According to data from the CME Group, 93% of all trading volume for 2011 was conducted through electronic trading. The current trend has been to have more trades taking place electronically rather than open outcry. Concern will come when the first technical glitch takes place – Facebook’s initial public offering caused a huge technical glitch on NASDAQ, which caused millions of orders to not be placed. The market was active but traders were unable to enter or exit positions. Electronic trading on futures exchanges will need to be prepared for massive spikes in volume, especially after the release of USDA reports.
Although most soybeans are used for the extraction of soybean oil (used as vegetable oil for culinary purposes) and soybean meal (used primarily as an agricultural feedstock), whole soybeans are also a tradable commodity. Soybeans are edible, and if you’ve ever gone to a sushi restaurant you might have been offered soybeans as appetizers, under the Japanese name edamame. The United States dominates the soybean market, accounting for over 50 percent of total global production. Brazil is a distant second, with about 20 percent of the market. The crop in the United States begins in September, and the production of soybeans is cyclical.
Cme Soybean oil
Soybean oil is an extract of soybeans that you and I know as vegetable oil. Soybean oil is the most widely used culinary oil in the United States and around the world, partly because of its healthy, nutritional characteristics. It contains about 85 percent unsaturated fat and very little saturated fat, which makes it appealing to health-conscious consumers.
In addition to its gastronomic uses, soybean oil is becoming an increasingly popular additive in alternative energy sources technology, such as bio-diesel. An increasing number of cars in the United States and abroad, for example, are being outfitted with engines that allow them to convert from regular diesel to soybean oil during operation. Because of their economic fuel mileage and low environmental impact, these soybean oil–enabled cars, known as frybrids, are becoming more popular.
Demand for soybean oil has increased in recent years as demand for these cleaner-burning fuels increases and as the automotive technology is more able to accommodate the usage of such bio-diesels. According to the Commodity Research Bureau (CRB), production of soybean oil increased from an average of 15 Billion Pounds in the mid-1990s to more than 22 Billion Pounds in 2003.
Features of Cme Soybean
If you want to trade soybean oil, you need to go through the Chicago Board of Trade (CBOT), which offers the standard soybean oil contract. Here is the contract information:
- Contract Ticker Symbol: BO
- Electronic ticker (CME Globex): ZL
- Contract size: 60,000 pounds
- Underlying commodity: Premium crude soybean oil
- Price Fluctuation: $0.0001/pound ($6.00 per contract)
- Trading Hours: 9:30 a.m. to 1:15 p.m. Open Outcry, 6:31 p.m. to 6:00 a.m. Electronic (Chicago Time)
- Trading Months: January, March, May, July, August, September, October, December