CME to launch new Black Sea grain fu­tures with Platts

Global Times US Edition - - BIZMARKETS -

CME Group, one of the world’s largest de­riv­a­tives ex­changes, will next month launch Black Sea wheat and corn fu­tures based on Platts’ price bench­marks to ex­tend its pres­ence in a boom­ing ex­port re­gion.

The cash-set­tled con­tracts will be­gin trad­ing on De­cem­ber 18, sub­ject to reg­u­la­tory clear­ance, the Chicagob­ased ex­change said.

The wheat con­tract will be based on the Platts Rus­sian Wheat 12.5 per­cent pro­tein free on board (FOB) Black Sea Deep Wa­ter daily price as­sess­ment.

CME launched a Black Sea wheat con­tract based on phys­i­cal de­liv­ery in 2012 but it has strug­gled to gain trac­tion and there are cur­rently no open po­si­tions.

That con­tract was based on de­liv­ery in des­ig­nated Rus­sian, Ukrainian or Ro­ma­nian ports and some traders have said a mar­ket based on a sin­gle ori­gin might prove more at­trac­tive.

“I think it could have a bet­ter chance of suc­cess than the pre­vi­ous con­tract with phys­i­cal de­liv­ery, es­pe­cially among houses trad­ing Black Sea grain who are not based in the re­gion,” a European trader said.

The corn con­tract will be based on the Platts Ukrainian Corn FOB Black Sea daily as­sess­ment.

The Black Sea crop re­gion, which en­com­passes Rus­sia and Ukraine, is set to ex­tend its ex­port reach fur­ther in the 2017-18 pe­riod as Rus­sia shifts a record wheat har­vest.

The re­gion’s grow­ing stature on global grain mar­kets has fu­eled in­ter­est in pric­ing tools.

The con­tracts will be de­nom­i­nated in US dol­lars, have 50-ton lots and be trade­able for off-screen deals with a min­i­mum of five lots.

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