CME Considers Soft Commodities Contracts as ICE Takes Over Liffe

CME Group Inc., the largest futures exchange, is considering new soft commodities contracts to compete with IntercontinentalExchange Inc. and NYSE Euronext Liffe, according to four people familiar with the situation.

CME, which is starting a new exchange in London this year, is talking to traders and brokers about new sugar, cocoa and coffee derivatives, according to the people, who asked not to be identified because the information isn’t public.

The Chicago-based company hired soft commodities specialists Peter Blogg and Eric Hasham from NYSE Liffe earlier this year. ICE, based in Atlanta, offers futures contracts in cocoa, arabica coffee and raw sugar while NYSE’s London-based Liffe derivatives exchange has trading in cocoa, refined sugar and robusta coffee.

Soft-commodities brokers met several times this year to discuss any potential reduction in competition from the ICE-NYSE merger, four people familiar with the matter said in May. The brokers approached exchanges including CME to see if they would introduce new contracts amid concern the deal may allow ICE to raise fees or extend trading hours, said the people.

CME already lists sugar, cocoa, coffee, orange juice and cotton on its NYMEX exchange. The contracts settle in cash at expiry while ICE and Liffe’s futures can be delivered into.

Fleur Howard, a spokeswoman for CME in London, declined to comment.

ICE agreed on Dec. 21 to acquire NYSE Euronext for cash and stock, valued at $8.2 billion at the time. European antitrust regulators lodged no objections to the takeover and a decision from the European Commission is expected by June 24, a person familiar with the matter said June 17.

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