Why Is Variation Margin Not Typically Required for Physically-Settled Futures Contracts?

Variation margin is required for cash-settled futures to account for the daily change in value. However, physically-settled futures, while still marked-to-market daily, do not always require a daily cash exchange of variation margin.

The full value of the contract is typically settled on the final expiration date through the delivery of the physical asset, though initial and maintenance margin still apply to cover default risk.