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CME Group (CME), B3 Partner for Soybean Futures Contract

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CME Group Inc. (CME - Free Report) and Brazil-based stock exchange B3 S.A. are teaming up to develop a soybean futures contract. Per the agreement, the contract will be unveiled by CME Group and B3 in the third quarter of 2020, if approved by regulators.

Founded in 2017, São Paulo-based B3 is one of the world’s largest financial market infrastructure companies. It provides trading services in an exchange and OTC environment. It develops and manages systems for the trading and settlement of securities and derivatives products on the basis of interest rates, foreign exchange, equity and inflation indices, and financial indicators. It also has a tradition of innovation in products and technology and is one of the largest companies in market value. It holds a prominent global position in the stock market industry.

The futures contract, launched in response to customer demand for regional hedging and price discovery tools, will indicate the export price at Brazil’s port of Santos. Further, it will extend the mini-soybean futures and options contracts that are already listed on both exchanges of CME Group and B3.

It will boost spread trading between CME Group Soybean contracts in North America and Brazil and will be available for trade on CME Globex or through block trades on CME ClearPort.

CME Group exchange consists of designated contract markets for the trading of futures and options contracts. It enables clients to trade futures, options, cash and over-the-counter (OTC) markets and optimize portfolios. It focuses on maximizing futures and options growth globally, diversifying business and revenues, and delivering unparalleled customer efficiencies and operational excellence. Futures and options trading are offered across asset classes through the CME Globex platform, cash and repo fixed income trading via BrokerTec, and cash and OTC FX trading via EBS.

Revenues (clearing and transaction fees) for futures and options increased 40% to $1.1 billion whereas total contract volume surged 47% to $1.7 billion in the first quarter of 2020.

This Zacks Rank #3 (Hold) company has declined 11.8% in the past year against the industry’s increase of 5.2%. Nonetheless, the company’s policy to ramp up its growth profile and capital position should continue to drive shares higher.


Stocks That Warrant a Look

Some better-ranked stocks from the security and exchange sector include MarketAxess Holdings Inc (MKTX - Free Report) , Deutsche Boerse AG (DBOEY - Free Report) and Nasdaq Incorporation (NDAQ - Free Report) . While MarketAxess Holdings sports a Zacks Rank #1 (Strong Buy), Deutsche Boerse and Nasdaq carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

MarketAxess Holdings operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. It surpassed estimates in three of the last four quarters, with the average positive surprise being 1.09%.

Deutsche Boerse operates as an exchange organization in Europe, the United States, and the Asia-Pacific.  The company delivered a positive surprise of 15.38% in the last reported quarter.

Nasdaq provides trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services worldwide.  It came up with average four-quarter positive surprise of 3.13%.

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