NYSE-parent ICE to launch cattle futures in challenge to CME Group

By Reuters News

By Tom Polansek

CHICAGO, Oct 13 (Reuters) - Intercontinental Exchange ICE.N plans to launch its first cattle and hog futures contracts on December 7, the market operator said on Tuesday, in a challenge to rival CME Group CME.O.

  • The New York Stock Exchange parent intends to offer physically delivered US live cattle futures, along with financially settled futures for live cattle, feeder cattle and lean hogs, pending regulatory review, according to a notice.

  • The first listed month for physically delivered live cattle will be June 2027, the notice said.

  • "We received significant inbound customer demand from those seeking credible alternatives to what has historically been a singular choice for cattle," said Trabue Bland, senior vice president of exchanges at ICE.

  • CME, which operates benchmark live cattle, feeder cattle and lean hog markets, had no comment about ICE's plans.

  • On Monday, CME canceled plans to temporarily migrate electronically traded livestock futures and options to Dallas from the Chicago region as part of a system shift to Google Cloud. The company said it was making faster progress than it expected on plans to migrate markets to the cloud.

  • CME's plan to temporarily relocate livestock markets to Dallas had raised concerns among high-frequency traders and market makers, said Joe Barker, senior director at CHS Hedging.

  • "We'd heard from a few of them that they were concerned about their ability to connect to the new system in Dallas on day one," Barker said. "If the liquidity providers, the market makers, aren't there, then it could hurt volume and liquidity for us to execute our business."

  • CME live cattle set record highs this year as the US herd shrank to a 75-year low and beef prices reached records for consumers.

  • ICE's physically delivered live cattle will trade under the symbol MOO and have the same contract size, trading hours and contract months as CME futures, according to contract specifications.

  • ICE launched grain and oilseed contracts in 2012 in an attempt to challenge CME in agricultural markets. CME, which owns the Chicago Board of Trade, maintained its dominance.

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