National Corn Growers Association (NCGA) reports:
The Chicago Mercantile Exchange has added a new product to their portfolio.
Contracts for urea, urea ammonium nitrate (UAN), and di-ammonium phosphate (DAP) began trading last week on the New York trading floor and are cleared through CME ClearPort.
These new fertilizer contracts provide opportunities for fertilizer companies and farmers to manage their risk. Ideally, the option to manage risk will make contracts between fertilizer retailers and farmers less risky and impacts to farmer margins will be minimized.
"For more than 150 years, agricultural producers and agribusinesses have relied on our benchmark grain futures and options contracts to manage their commodity price risk," said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group.
"The fertilizer products we're introducing allow market participants to manage fertilizer prices, one of the key and most volatile price inputs into grain production, further allowing a focus on margin management."