CRUDE PALM OIL FUTURES
Coming in May 2010 to CME Group
Palm oil is the world's most consumed edible oil. The main producers of the oil are Malaysia and Indonesia. The main consumers are India and China. Palm oil serves as a cooking oil but is also used to make soap, washing powders and biodiesel. Soon, CME will offer a cash-settled, US dollar-denominated futures contract on Globex.
Final cash settlement will be based on the Bursa Malaysia Derivatives Berhad Crude Palm Oil futures contract (the global benchmark for crude palm oil).
In addition to outright long and short positions, this new contract will offer new spread trading opportunities againt the CBOT's soybean oil futures contract. Here's a chart of the historic price relationship between Soybean Oil futures and Palm Oil futures.
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