1、 The Development History of American Egg Futures Market

The United States is the first country in the world to carry out egg futures trading. In 1874, some suppliers set up in Chicago agriculture products Exchange, for forward trading of eggs and other commodities. In 1898, butter and egg dealers withdrew from the Agricultural Products Exchange and established the Chicago Butter and Egg Exchange. In 1919, the Chicago Butter and Egg Exchange was officially renamed the Chicago Mercantile Exchange (CME). After the establishment of CME, eggs began to be traded as futures. In the 1980s, due to the great changes in the spot industrial structure of eggs, large supermarkets gradually replaced the ubiquitous grocery stores as the main sales channel of eggs, and small farms were gradually merged by large farms. The scale of layer farms became larger and larger, and they began to supply eggs directly to large supermarkets. The price of eggs tended to be stable and the change trend became predictable, Spot enterprises are no longer exposed to the risk of price fluctuations, and hedging demand has declined significantly. For this reason, CME stopped the trading of egg futures in September 1982.

2、 CME egg futures contract design and trading

（1） Futures contract adjustment history

The trading of CME egg futures has lasted for nearly a hundred years. With the change of the spot market pattern, the design of the egg futures contract has also been modified many times:

1. In December 1919, CME was officially listed and began to trade egg futures.

2. In September 1936, CME made the first standardized amendment to the egg futures contract, and eggs became the real standard futures variety.

3. In 1966, CME changed the subject matter of the egg futures contract from frozen eggs to fresh eggs, which can be delivered at a discount.

Since 1940, with the innovation of egg production technology and the improvement of output, the supply of eggs has become more stable, and fresh eggs have gradually become the new favorite of the spot market. The cold storage of eggs has become unprofitable, the market scale of cold storage eggs has gradually shrunk, and the futures trading of eggs has become very light. In 1966, in order to actively respond to the changes in the pattern of the egg spot market, CME adjusted the subject matter of the egg futures contract to fresh eggs. Refrigerated eggs can still replace delivery, but they need to bear a certain discount. The modification of the egg futures contract has achieved partial success, and the futures trading has become increasingly active. Fresh eggs have become the main trading and delivery varieties of speculators and hedgers, and refrigerated eggs have gradually withdrawn from trading.

（2） Contract terms and quality standards

1. Contract terms

Taking refrigerated eggs as an example, the trading unit of CME egg futures contract is designed according to the number of eggs, and the specification of each contract is 12000 dozen eggs. See Table 1 for specific terms

Table 1: CME egg futures contracts

　　C A Brown， Future trading in butter and eggs [J]. Journal of farm economics， Vol.15， No. 4， pp.670-675.

2. Quality standards and grading The American egg standard is divided into two parts: quality grade and size grade. The quality grade mainly refers to the sensory indicators such as eggshell, air chamber, egg white, and egg yolk. Eggs are divided into four grades: AA, A, B, and C, and eggs are divided into six grades by the weight of each dozen.

Table 2: Egg quality grade

Data source: Egg science and technology (fourth edition)

Table 3: Size class

Data source: USDA