July 18, 2011

Chicago Mercantile Exchange terminates pork belly future

The Chicago Mercantile Exchange, which owns CBOT, has declared the termination of the pork belly future after being available for 50 years.

The demise of the belly future, the pork belly is the part of the hog from which bacon comes, was not entirely a shock because the investment had been thinly-traded in recent years.

Packinghouses increasingly have made their own contractual deals with hog producers rather than investing on the futures board.

"Because of a prolonged lack of trading volume and after significant discussion with industry participants, CME will be delisting frozen pork bellies futures and options" effective Monday (Jul 18), CME said in a statement to traders.

Hogs and cattle will still be traded on the Chicago Board.

Pork bellies had become volatile in recent years, particularly last year when their prices more than doubled during the summer and played a role in driving up the price of bacon.