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CME announces cash-settled, dollar denominated Crude Palm oil futures
In a move, which may shatter, for what seemed like, a pretty solid truth laying in the heart of the prophecy of The Cree Indians which goes something like this; "Only after the last tree has been cut down…the last river has been poisoned…the last fish caught, only then will you find that money cannot be eaten.", CME announced that it will, as of May 24th, actively trade cash-settled dollar denominated futures of the most consumed eatable oil on the Planet Earth, Crude Palm oil.
Obviously exploring new capital multiplication opportunities, CME found that all mechanisms of dilution, price manipulation, and well, idiocy have been explored, bled dry and exhausted in the conventional markets, and is now formally announcing first ever [as fair as I know] non-deliverable, cash-settled only commodity future contract.
For those of you who are not familiar with, just, how widespread the usage of palm oil is, I wish to point you towards reading this little tidbit about palm oil which will tell you all you need to know:
According to Hamburg-based Oil World trade journal, in 2008, global production of oils and fats stood at 160 million tonnes. Palm oil and palm kernel oil were jointly the largest contributor, accounting for 48 million tonnes or 30% of the total output. Soybean oil came in second with 37 million tonnes (23%). About 38% of the oils and fats produced in the world were shipped across oceans. Of the 60.3 million tonnes of oils and fats exported around the world, palm oil and palm kernel oil make up close to 60%; Malaysia, with 45% of the market share, dominates the palm oil trade.
It was only expected that a way for price manipulation would be found for the one of the largest and most significant agricultural commodities. As with all cash settled commodities contracts this one will provide absolutely nothing beneficial to the millions of laborers across Southeast Asia and billions of consumers, and will only introduce volatility and price manipulation into a market which is non existent in the minds of most people.
Full CME statement:
Trade Cash-Settled, Dollar-Denominated CPO
Launching trade date May 24, 2010With the launch of futures on Crude Palm Oil (CPO), CME Group customers will be able to trade the world’s most-consumed edible oil in a cash-settled, dollar-denominated contract, with the safety and liquidity of CME Group.
This expansion of the edible oil product suite also creates opportunities for cross-trading with soybean oil based on the historically strong correlation between these products. Together, crude palm oil and soybean oil account for about 61 percent of all the edible oil in the world, with palm kernel oil an additional 4 percent of oil consumed.
Both production and consumption of palm oil are growing. The main producers of the oil are Malaysia and Indonesia. The main consumers are China and India. Crude palm oil is widely traded and used around the world. It serves primarily as cooking oil but is also used to make soap, washing powders, personal care products and biodiesel.
Final Cash Settlement prices will be based on the Bursa Malaysia Derivatives Berhad Crude Palm Oil futures contract (FCPO).
This is the global benchmark for crude palm oil that is physically delivered and traded in Malaysian ringgits.
Note: Nearby CPO futures will reference the third forward FCPO month.
Key features of Crude Palm Oil futures:
Dollar-denominated
Cash-settled
Electronically traded on CME Globex
Safety and liquidity of CME Group
Contract months that mirror and settle to the ringgit-denominated physically delivered Bursa Malaysia contract (FCPO)
Reduced capital requirements due to cross product margin efficiencies with other CME Group contracts
Crude Palm Oil Futures Contract Specifications
Crude Palm Oil Futures Fact Card
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Hello you bastard. It is with great trepidation that I question what appears to me to be such a superb chess player. In other words, I don't want to piss you off or hurt your feelings! I have dollars and spend Euros. I was gifted an unplanned son by an Austrian woman a year ago. So, I am trying to time moving dollars, borrowing Euros, purchasing property, etc. Therefore, I have been hanging on your every word and that of Bruce, Leo, Andy Dufresne and Orly too.
- I do not think the Fed will hide swaps. They say that they will give a weekly report. And, to your point, the more swaps they report the weaker the dollar. Why hide it?
- In the spirit of cooperation, I think the Fed opened the swap lines to give the ECB the tool to protect the Euro if it wants. But I don’t think the ECB will want.
- To me, it is less of a race to the bottom and more of a controlled communal descent.
- It appears to me the Eurozone needs a weaker currency more than the US given that deflationary forces seem greater in Europe than in the US going forward.
- Brussels thinks they bought 2 years to figure out political/fiscal United States of Europe and the structural reforms necessary to do it and grow. They didn’t.
- The „market“ will force them to substitute a weak Euro and the competitiveness it brings in lieu of structural reform now, not in 2 years.
- I think we are headed to a one world currency, NWO, etc.
- The easiest next step to do that is to bring parity within the „markets“ for EURUSDGBP because it is an easy sell politically if the „markets“ have already achieved parity.
Your move.
And, one more thing, don't stop posting if you are wrong. Gute Besserung.
The soybean industry is up to its old tricks, attempting to demonize the tropical oils. This time, the attacks are in the guise of environmentalism. However, if the truth were told, the soy industry would be exposed as one of the world’s worst offenders. Palm oil production, on the other hand, is protecting areas like the Amazon rain forest from destruction.
Up next: non-deliverable, cash-settled only futures on rice.
What the fuck is wrong with these people?
This, my friends, is the very definition of an Oxymoron.
Waiting for Harry Wanger's input on palm oils. He's probably tried them all.
You are too fast! I was thinking this brings greasing palms to a whole new level.
Both production and consumption of palm oil are growing. The main producers of the oil are Malaysia and Indonesia. The main consumers are China and India.
Well, that says it all. Growing production, consumed by BRIC, spells new vacation homes and bigger bonuses (or is it bonei?) Who cares that GS traders will artificially elevate the price into the next biggest bubble and that poor will be left hungry?
It will be interesting to see how CPO plays out. I am involved in the crush and bean oil. This will facilitate spreading with BO. There are a lot of ag products in the pipeline from what I understand. I stopped studying fundamentals a few years ago. Sure the weather makes a difference etc. but it seems these days once you make your analysis you need to do the opposite because the manipulators move it against the fundamentals to squeeze everybody first, and then let the primary trend take over......after the weak hands have been fleeced !