CME Group has announced plans to expand its dairy derivatives business into Europe, introducing new futures and options contracts for key dairy commodities before the end of 2026, subject to regulatory reviews. The move aims to provide dairy industry participants with additional tools to manage price volatility, improve risk management and strengthen price transparency across European dairy markets.
The planned contracts will cover European skimmed milk powder, butter, whey powder and liquid milk. The expansion follows an agreement between CME Group and the European Energy Exchange (EEX) earlier in 2026.
New Contracts Target Key European Dairy Products
The new futures and options contracts will initially track EEX indices before transitioning to CME Group indices. The products will be financially settled and listed on CME, subject to its rules and the completion of relevant regulatory reviews.
By introducing these contracts, CME Group aims to offer dairy producers, processors, traders and manufacturers a broader range of financial instruments to manage regional price risks. Futures and options can help market participants plan purchases and sales, manage exposure to price fluctuations and improve financial predictability.
John Ricci, Global Head of Agricultural Products at CME Group, said the company had long served the dairy industry in the United States and was now extending that commitment to Europe. He highlighted the benefits of offering futures and options on a single platform alongside CME’s existing US dairy contracts.
The expansion is intended to give European dairy market participants more flexibility in managing price exposure while providing access to a wider range of agricultural derivatives.
Dairy Derivatives Activity Reaches Record Levels
The announcement follows strong growth in CME Group’s dairy derivatives activity. The company reported record monthly open interest averaging 420,922 contracts per day in September, representing a 42% increase compared with the same period a year earlier.
CME Group also recorded an all-time daily open interest high of 461,493 contracts on 29 September.
Open interest measures the number of outstanding derivatives contracts that have not been closed or settled. Rising open interest can indicate growing participation in a market and increased use of derivatives for risk management and trading.
CME Group and EEX are also working to transition the EEX Weekly European Cheese Indices and the Pan European Butter Index to CME Group. The initiative is intended to maintain continuity for market participants while supporting the development of CME’s European dairy products.
Tungsten Futures to Expand Critical Minerals Portfolio
Alongside its European dairy expansion, CME Group announced plans to launch tungsten futures by early the first quarter of 2027, subject to regulatory reviews.
The company said the global tungsten market produces approximately 85,000 to 95,000 metric tonnes annually and is valued at more than $20 billion based on current spot prices. Tungsten has been identified as a critical mineral by the United States, the European Union, Japan, India and other economies.
The planned contract will be financially settled against Fastmarkets’ assessment of ammonium paratungstate (APT), on a duty-unpaid basis for CIF Rotterdam and Baltimore.
CME Group said the contract would provide market participants with a tool to manage price risk in a market that has an active spot market but lacks a futures market. Industry representatives also highlighted the potential benefits of improved forward pricing for manufacturers and supply-chain businesses.
CME Group reported that its metals business averaged 1.2 million contracts traded daily across precious and industrial metals during the first nine months of 2026, an increase of 41% year over year.
Implications for the Dairy Industry
The planned European dairy contracts reflect the growing role of financial instruments in managing risks across agricultural commodity markets. Dairy prices can fluctuate with changes in milk production, demand, processing economics and international trade conditions.
Futures and options may help producers, processors and other market participants manage these fluctuations, although their effectiveness depends on contract design, liquidity and how closely the derivatives track the physical products being traded.
The introduction of contracts for skimmed milk powder, butter, whey powder and liquid milk could broaden the range of European dairy products covered by exchange-traded risk management tools. The planned transition of selected EEX indices to CME Group also signals closer cooperation between the two markets.
With dairy derivatives activity reaching record levels, CME Group’s European expansion represents a further development in the financial infrastructure supporting the dairy sector. The success of the new contracts will depend on market participation, regulatory approval and their ability to meet the practical hedging needs of dairy businesses.