The New York Mercantile Exchange has launched two new ethanol swaps contracts to compete with ethanol swaps on ChemConnect, which was recently acquired by the Intercontinental Exchange (ICE) and CME Group’s ethanol futures and cash settled ethanol swaps, which it recently acquired by purchasing the Chicago Board of Trade (CBOT).
“It’s going to be interesting to see if there is enough interest to become viable contracts. I expect them to be more of a slow burn,” says Rick L. Kment, ethanol and biofuels analyst for DTN. “The thing that has made RBOB and crude oil so successful is not commercial traders, while they are an important part of it. It’s really the investment and the non-commercial trader that takes that offsetting position; and especially with swap contracts, that kind of limits itself to being commercially driven.”
