CME issues contingency plan for October lean hogs settlement
CHICAGO (Reuters) - The CME Group Inc on Monday outlined how it will determine final settlement prices for its October 2013 lean hog futures and options next week if the U.S. government shutdown persists.
Final settlements for the contracts normally are based on an index that the CME calculates from price data supplied by the U.S. Department of Agriculture. Because of the government shutdown, the CME Group last week said it would suspend calculation and distribution of its indexes for lean hog as well as feeder cattle.
The October hogs contract will expire from trading on October 14, with its final settlement price scheduled for October 16.
If USDA's price data from October 11 and 14 is available by October 15, the exchange said it would use the data to determine the final settlement price for October 2013 contracts.
If the government data is not available by October 15, CME said it would calculate final settlements based on the volume weighted average price of the October lean hogs futures contract for the two-day period of October 11 and 14.
The price would incorporate activity from both the electronic Globex platform and the open-outcry pit during "regular" trading hours, from 9:05 a.m. to 1 p.m. CDT (1405 to 1800 GMT) on October 11, and 9:05 a.m. to 12:00 noon on October 14.
"The alternate final settlement price will be applied to any open positions in October 2013 futures and options on the normally scheduled date of October 16," the exchange said in a notice.
(Reporting by Julie Ingwersen; Editing by Lisa Shumaker)
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