CME Pork Cutout
futures and options

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Clear-cut opportunities for enhanced risk management

Arrangements between hog producers and packers or processors today are diverse and ever-evolving. Once based almost exclusively on the value of live hogs, many agreements now pay greater attention on prices further down the value chain, particularly the pork cutout.

New CME Pork Cutout futures and options are designed to give the US pork industry and export markets tailored risk-management tools on the cutout. These contracts are cash-settled to the CME Pork Cutout Index and complement CME Lean Hog futures and options, expanding our lineup of leading Agricultural benchmarks.

Contact us

For more information, please contact a member of our team at pork-cutout@cmegroup.com.

Trading resources

Hedge more precisely

The contract settles directly to the CME Pork Cutout Index, which tracks prices of pork cutout values. That provides the tight price correlation needed to better manage exposure.

Tap into an active market

Explore opportunities driven by the world’s most consumed protein: The United States produced 27.6 billion pounds of pork in 2019. 

Source: United Nations Food and Agriculture Organization (FAO)

Add exchange-traded benefits

Trading futures on a regulated exchange gives you greater price transparency with nearly 24-hour trading access, plus the safety and security of CME Clearing backing every transaction.

Understanding the pork cutout

Source: USDA

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Contract specifications

Contract Title Pork Cutout Futures Options on Pork Cutout Futures
Contract Unit 40,000 pounds
Price Quotation U.S. Cents per pound
Trading Hours CME Globex: Monday - Friday: 8:30 a.m. - 1:05 p.m. CT
Pre-Open: 8:00 am – 8:29.59 am & 2:30 pm – 4:00 pm
CME ClearPort: 5:00 p.m. Sunday to 5:45 p.m. Friday; with a 15-minute break Monday – Thursday each day beginning at 5:45 p.m.
Commodity Code PRK PRK
CME Rulebook Chapter 156 156A
Initial Listing months DEC20, FEB21, APR21, MAY21, JUN21, JUL21, AUG21, OCT21, DEC21, FEB22, APR22, & MAY22
Minimum price increments $0.00025 per pound ($10 per tick)

Full Tick: $0.00025 per pound ($10)
Half Tick: $0.000125 per pound ($5)

Option Type - American
Strike Price listing procedures - Strikes listed for 50% of the underlying settlement price above and below the at-the-money strike at $0.02 per pound increments in all months and additional strikes listed for 25% of the underlying settlement price above and below the at-the-money strike at $0.01 per pound increments in the nearest 3 months.
Exercise procedure - Any business day that the option is traded until 5:30 p.m. CT
Termination of Trading Trading terminates on the 10th business day of the contract month.
Settlement Method Financially settled to the CME Pork Cutout Index.
Position Limits 1,000 contracts net long or short in any single month.
350 contracts net long or short as of the close of trading on the fifth business day of the contract month.
Reportable Level 25 contracts
Block Trade Minimum 5 contracts
Block Trade Reporting Window 5 minutes 15 minutes
CME Globex matching algorithm F: First In, First Out (FIFO)

View full contract specifications.

Pork Cutout futures and options 11/8/2020
Product Name CME Globex Bloomberg Refinitiv  Globex RIC Root Refinitiv Composite RIC Root TT CQG DTN Fidessa FIS Global ION (Pats & FFastFill) Itiviti (Orc & Tbricks) Vela
Pork Cutout Futures PRK PRCA <Comdty>  1RPK  RPK  PRK PRK  @PRK PRK PRK PRK PRK PRK
Options on Pork Cutout Futures PRK PRCA <Comdty> OMON   1RPK  RPK PRK PRK  @PRK PRK PRK PRK PRK PRK

Learn about the pork cutout

Learn the fundamentals behind the pork cutout – what it is, how it impacts pork pricing, and more.

Contract resources

CME Pork Cutout Index

Get an overview of the Pork Cutout Index and how its calculated.

FAQ

Get more information about Pork Cutout futures and options contracts at CME Group.

Pork Cutout Futures and Options Fact Card

Get an overview of Pork Cutout futures and options including contract specifications.

Cash-settled commodity index prices

Find daily price data for CME Group Indexes on Pork Cutout, Feeder Cattle, Lean Hogs, and Fresh Bacon.

Export Demand has Fast Tracked the Evolution of Pork Markets

Featured OpenMarkets white paper discussing the evolution of Pork markets.

The Pork Cutout vs. Lean Hog Spread

Learn more about inter-commodity spread trades between the Pork Cutout futures and options contracts and the Lean Hog futures and options contracts.

Using CME Pork Cutout Futures to Hedge Wholesale Pork Products

This white paper provides an overview of the Pork Cutout contracts and illustrates how they may be used to manage wholesale pork product price risk.

Education

Self-Study Guide to Hedging with Livestock Futures & Options

An introduction to the mechanics of using futures and options to help livestock producers and processors become comfortable with the futures markets and how to use them.

The Livestock Overview

Video module to learn the trading basics and history of Livestock futures and options at CME Group.

Lean Hogs Product Overview

CME Group Lean Hog futures product overview video.

Hedging with Livestock Futures and Options

Video module detailing how to use futures and options for risk management in the livestock markets, focused on enhancing the hedger’s knowledge base.

CME Direct

CME Direct Users: download the Pork Cutout Trading Grids:

  1. Right click on the buttons below
  2. Save the files as an .XML on your computer
  3. In CME Direct, select import view in the main menu
  4. Import the grid into CME Direct

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