Livestock feeders and ethanol producers should evaluate the CME Group's new futures contract for distillers dried grains, according to University of Nebraska-Lincoln Extension Livestock Market Specialist Darrell Mark. The contracts will help both ethanol producers and livestock feeders more effectively hedge their gross profit margins, and can help feeders and other buyers protect against future prices increases in distillers grains. The contracts can also help feeders complete a spread or "crush" hedge to protect their feeding margins, Mark said, adding that more than 90 percent of the cattle on feed in Nebraska are fed some type of ethanol co-product. The futures contracts begin trading on April 26 and will allow buyers to lock in a price for DDG up to 12 months in advance.

(Wauneta Breeze, March 17, 2010)

(http://www.waunetanebraska.com/…)