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Nymex Enters Soft Commodity Futures Market

Branching out into other markets while also beating its chief rival to the punch, the New York Mercantile Exchange said it was introducing six new soft commodity futures contracts on the Nymex ClearPort clearing and trading platform at 6 p.m. EST Wednesday for a Dec. 21 trade date. The exchange said it anticipates listing the contracts on Chicago Mercantile Exchange's Globex electronic platform by the end of January 2007.

The move would appear to be a preemptive strike by Nymex in anticipation of the merger completion between rival IntercontinentalExchange (ICE) and the New York Board of Trade (Nybot). First announced in September (see Daily GPI, Sept. 18), the merger, which is expected to be completed during the first half of 2007, would bring Nybot, the 100-year-old open outcry exchange for sugar, coffee, cocoa, cotton and other commodities and financial products, together with ICE, the leading electronic energy exchange.

The new Nymex futures contracts and their commodity codes are Nymex cocoa (CJ), Nymex coffee (KT), Nymex cotton (TT), Nymex FCOJ (frozen concentrated orange juice) (FJ), Nymex sugar #11 (YO) and Nymex sugar #14 (FT). The contract units will be 10 metric tons for Nymex cocoa futures; 37,500 pounds for Nymex coffee futures; 50,000 pounds for Nymex cotton futures; 15,000 pounds for Nymex FCOJ futures; and 112,000 pounds for Nymex sugar #11 and Nymex sugar #14 futures contracts. For all contracts, the initial contract month will be March 2007. Fees will be waived for the first six months, through June 2007.

"Nymex is excited to be the first to offer these vital soft commodity futures contracts on an electronic trading and clearing platform," said Richard Schaeffer, Nymex chairman. "We are proud to provide innovative and timely solutions to our customers based on their risk management needs on a dynamic electronic platform. Launching new product lines, such as Nymex iPort and the soft commodities, is part of our continued efforts to diversify our business."

Earlier on Wednesday, Nymex unveiled Nymex iPort, a suite of energy and metals index futures contracts. Nymex iPort products will allow investors to hedge in the Nymex and Commodity Exchange Inc. (Comex) markets using futures indexes. Nymex said the index products will offer broad sector coverage in a single price and a single trading vehicle. Nymex iPort contracts will be available for trading on the Nymex trading floor and the Globex electronic trading platform and for clearing through Nymex ClearPort clearing. "We believe these contracts will serve as an additional risk management tool for our current customers and as an innovative way to enter the energy markets for new customers," said Nymex CEO James E. Newsome.

Margins and position accountability levels for the soft commodity futures contracts are available on the Nymex website at www.nymex.com/softs.

CME Chairman Terry Duffy said, "Nymex's entry into the soft commodities market is a bold move and logical extension of their product strategy. We look forward to working closely with Nymex to achieve a successful launch on CME Globex."

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