What Are Butter Futures?
Although there is not a significant amount of interest in gaining exposure to butter, there are several options in the futures market that investors can choose from to play or hedge against the commodity. CME’s butter futures and cash-settled butter contracts are the most direct ways for investors to gain exposure: the former contract reflects the cash market supply, demand, and cold storage stocks fundamental information, while the latter is an electronically traded contract based on 20,000 pounds of Grade AA butter. There are also a number of other diary-based futures, like Milk Class IV, offered on the same exchange that will grant indirect exposure to butter prices.
