CME GROUP: Futures Crude Palm Oil Trading

May 7, 2011
CME Group Strategic Partnership with Bursa Malaysia Berhad (BMD)

On 17 September 2009, CME Group and Bursa Malaysia Berhad formed a strategic partnership aimed at contributing to the overall growth of the Malaysian capital markets by improving global access to the Malaysian derivatives market.

This partnership includes the licensing of the settlement prices of the Crude Palm Oil Futures (FCPO) contract as well as facilitating global distribution of Bursa Malaysia Derivatives’ contracts through the CME Globex electronic trading platform. The partnership not only provides improved accessibility but elevates the presence of the benchmark Malaysian derivatives worldwide.

CME Globex Access
With BMD now utilizing CME Globex as its electronic trading platform for futures, including the global benchmark Crude Palm Oil futures (FCPO) contract, customers can more easily engage in spreading and arbitrage opportunities between the CME CPO and the BMD FCPO contracts. This arrangement offers unparalleled global distribution through CME Globex’s multiple access points through nine international telecommunication hubs worldwide, one of which is located in Kuala Lumpur.
USD-denominated Crude Palm Oil Futures
With the launch of the Crude Palm Oil Futures (CPO) contract, CME Group customers are able to trade the world’s most consumed edible oil in a cash-settled contract with the safety and liquidity of CME Globex.

The CME CPO contract, as a USD-denominated palm oil futures contract, complements the existing Malaysian MYR-denominated Crude Palm Oil Futures (FCPO) contract. It is cash-settled to the physically-delivered BMD FCPO cOntract. CPO also consolidates Malaysia’s position as the leading price discovery centre for palm oil traded globally.
Key Features of CME’s Crude Palm Oil Futures
• USD-denominated
• Cash-settled to the physically-delivered BMD FCPO contract
• Electronically traded on CME Globex
• Reduced capital requirements due to cross-product margin efficiencies with other CME Group contracts