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Backers of Hamburger Futures Bullish

Reuters

Chicago’s freewheeling futures traders are waiting eagerly to sink their teeth into what promises to be a tasty new commodity that debuts on today: hamburger futures. The futures contracts--with each one representing 20,000 pounds of boneless ground beef--are designed to give anyone in the ground beef business price protection. That group includes cattle ranchers, beef packers and meat processors, supermarket chains and retail stores, and restaurants, said Tim Brennan, a governor at the Chicago Mercantile Exchange, which is listing the new contracts. The CME will allow speculators from its huge financial futures pits to freely trade the boneless beef contract in order to maximize trading by locals. There will be two new contracts, one for boneless beef, which is 90% lean, and one for boneless beef trimmings, which are 50% lean. The two contracts have been designed in partnership with the ground beef industry, which uses both 90% and 50% lean or “fat-free” material for blending purposes.


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