Ethanol wars

In a move that smelled of oneupsmanship, the Chicago Mercantile Exchange (CME) announced it was getting into the energy futures market hy launching an ethanol contract on March 29, just prior to the Chicago Board of Trade's (CBOT) planned

Neither will he first as the New York Board of Trade (Nyhot) launched its world ethanol contract last May. The Nybot contract, which has limited volume, is hased on ethanol derived from sugar, whereas the Chicago exchanges' contract will he hased on ethanol derived from com.

As for the CME's timing, a spokesperson for the CBOT says, "The CBOT has held extensive conversations with renewahle fuel industry participants and potential users of an ethanol futures contract, soliciting feedback and input on a contract design that best meets their risk management needs. Domestically, corn is the primary material used in ethanol production, a factor that makes the CBOT the natural home for ethanol futures."

A CME spokesperson says the CME's contracts are developed independently of other exchanges' contracts. Apparently so, as the CBOT had acknowledged plans for a com hased ethanol contract more than a year ago and the CME gave few clues this contract was on the way.