CME Group said Thursday that it has launched a broad-based Agriculture Index designed to provide a unified price benchmark tracking the aggregate performance of five sectors central to the global farm economy.
The index integrates futures prices across Grains, Oilseeds, Livestock, Dairy and Lumber, and will be updated on a monthly basis.
CME Group said the five-sector structure allows the benchmark to comprehensively track structural changes in supply chains, shifting industrial demand and evolving consumer habits affecting the cost of farm goods worldwide.
John Ricci, Managing Director and Global Head of Agricultural Products at CME Group, stated: “Agriculture doesn’t move one commodity at a time — and neither should the benchmarks that track it.
“By aggregating futures prices across five sectors on a single platform, the CME Group Agriculture Index gives producers, traders and analysts a more complete read on the farm economy and where it’s headed.”
The index methodology is said to be designed to neutralise price differences between delivery months for futures contracts while applying appropriate weightings across different markets, providing what CME Group described as a fair representation of commodity costs.
The Agriculture Index complements the existing Purdue University/CME Group Ag Economy Barometer, a monthly nationwide survey of 400 agricultural producers measuring sentiment and outlook on the farm economy.
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