The contract will be available to trade on CBOT’s electronic platform, as well as open auction, from 9:30 a.m. to 1:15 p.m. Central Standard Time (CST). The contract will resume trading electronically from 6:36 p.m. to 6 a.m. CST daily.
Rook said the electronic contract will complement the open auction, adding there has been high demand for the ethanol contract. “It opens up the market for participants besides those working with a broker in the pit,” she said.
The CBOT electronic trading platform allows traders to build or purchase trades to suit their needs in addition to allowing the marketplace to operate with greater ease and efficiency. Rook said it also adds transparency to the contract.
CBOT launched its initial ethanol futures contract in March 2005 after working with ethanol producers and refiners to design an effective vehicle for both price discovery and the management of price volatility within the domestic ethanol market. The contract has had successful consecutive deliveries, demonstrating the efficiency of the physical delivery settlement process. “Prior to the [initial ethanol futures contract] launch, the ethanol industry was small compared to agriculture markets or the petroleum industry,” Rook said. “We set our expectations accordingly. Volume is the only measure. While there isn’t a lot of contract volume, it has brought much needed transparency to the market.”
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Rook said the specifications of the current contract have not been reconfigured for the electronic trading platform. “We have confidence in the success and growth potential of this contract,” she said.
This will be the second CBOT agricultural futures contact to trade electronically during daytime open auction trading, joining the South American soybean futures contract. CBOT intends to offer the remainder of its agricultural futures contract—corn, soybean, soybean oil, soybean meal, rough rice, wheat and oat futures—on its electronic trading platform during daytime trading hours beginning Aug. 1.
The New York Board of Trade began trading world ethanol futures and options contracts in May 2005.
For more information on ethanol futures, visit CBOT’s Web site at www.cbot.com. Market users can access live, real-time electronic bids and offers for the most active trading contract months for free at www.cbot.com/ethanol.
“Given the recent increases in corn-based ethanol production and attention it is receiving in the market, it is critical to list this contract electronically during daytime trading to expand the contract’s availability,” CBOT CEO Bernard Dan said. “The global distribution and speed of our e-CBOT platform will provide market participants with real-time bids and offers, creating more value and opportunity.”
