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CME launches new European biofuel swap futures contracts

US-based derivatives marketplace CME Group has launched trading and clearing services for four new European biofuel swap futures contracts.

Trading will be available on the New York trading floor and clearing services through CME ClearPort, a set of flexible clearing services open to over-the-counter (OTC) market participants to substantially mitigate counterparty risk and provide neutral settlement prices across asset classes.

Trading and clearing are scheduled to begin on 25 April for trade date 26 April. These contracts will be listed by NYMEX and subject to the rules and regulations of NYMEX and CME.

The new swap futures contracts and their commodity codes will be: RME biodiesel (Argus) FOB Rdam vs. ICE gasoil spread (KE); FAME 0 biodiesel (Argus) FOB Rdam vs. ICE gasoil spread (LE); ethanol (Argus) T1 FOB Rdam excluding duty (WE); and ethanol (Argus) T2 FOB Rdam including duty (YE).

The contracts will be listed for 24 consecutive months with the first listed month being the May 2010 contract. The ethanol contracts will be 100m3 in size, with a minimum price fluctuation of of $0.001 per tick (T1) and €0.001 per tick (T2). The biodiesel contracts will be 100 tonnes in size, with a minimum price fluctuation of $0.001 per tick.

‘These new contracts add to the already successful suite of biofuel swap futures that are currently listed on CME ClearPort and provide the ultimate level of customer protection and mitigation of counterparty risk through CME Clearing,’ Joe Raia, CME Group MD of energy products and services, notes. ‘This gives our global customer base the margin efficiencies that are afforded by clearing these important international contracts in one clearinghouse.’