CME Soybean Oil Futures Contract Specifications: All You Need to Know
If you are an investor or trader looking to diversify your agricultural commodity portfolio, soybean oil futures can be an excellent option. In this article, we will discuss the CME Soybean Oil Futures Contract Specifications, so you can make informed trading decisions.
What are Soybean Oil Futures contracts?
Soybean oil futures contracts are agreements to buy or sell a certain amount of soybean oil at a predetermined price and date in the future. The CME Group offers soybean oil futures contracts, which are the most commonly traded soybean oil futures in the US market.
What are the CME Soybean Oil Futures Contract Specifications?
The CME Soybean Oil Futures Contract Specifications dictate the terms of the contract, including contract size, price quotation, trading hours, delivery months, and settlement procedures. Let`s take a look at each specification in detail.
Contract Size
The CME Soybean Oil Futures Contract Size is 60,000 pounds (approximately 27 metric tons) of crude, degummed soybean oil. The contract size is significant because it determines the minimum amount of soybean oil that can be traded. For example, if the soybean oil price is $0.30 per pound, the value of one contract would be $18,000.
Price Quotation
The price quotation for CME Soybean Oil Futures Contracts is in cents per pound. The minimum price fluctuation is 0.01 cents per pound (or $6 per contract). This specification is essential because it determines the smallest price change that can affect the contract`s value.
Trading Hours
The CME Soybean Oil Futures Contracts trade on the CME Globex electronic trading platform from Sunday to Friday, from 7:00 pm to 7:45 am and 8:30 am to 1:20 pm CT. The trading hours are crucial because they determine the times when investors can enter and exit positions in the market.
Delivery Months
There are 21 delivery months for CME Soybean Oil Futures Contracts, starting with the current calendar month and followed by the next 20 months. The trading of the current month contract ceases at the end of the last business day of the month before delivery. The delivery months are important because they determine when the contract obligates the trader to take delivery of or deliver soybean oil.
Settlement Procedures
The CME Soybean Oil Futures Contract settles financially, meaning that no physical delivery of soybean oil occurs. Settlement procedures happen on the business day following the last trading day of the month. The settlement price is the final settlement price determined by the CME Group on the last trading day of the month.
Conclusion
The CME Soybean Oil Futures Contract Specifications provide traders and investors with essential information about the terms of the contract. Understanding the contract size, price quotation, trading hours, delivery months, and settlement procedures is crucial for making informed trading decisions. By trading soybean oil futures contracts, investors can manage risk and gain exposure to the soybean oil market without owning physical soybean oil.