CLEAR Grain Exchange (CGX) amended its canola terms overnight, bringing them into line with Australian Oilseeds Federation (AOF) standard terms.
Canola contracts traded on CGX will now be paid on the basis of clean-seed weight with premiums and discounts calculated on oil content as per AOF standards.
Clear Grain Exchange managing director, Nathan Cattle, said the change was made to bring the exchange in line with the broader industry. AOF standards for canola price adjustments are largely adopted by the Australian grain industry.
Previously CGX canola physical (spot) contract transactions were paid flat price, with no price adjustments for admix or oil content, practically skewing participants away from premium oil canola and toward lower oil canola.
The price adjustments account for impurities (also known as admix) and oil content such that final payment of a canola trade is based on clean seed tonnes (delivered tonnes less admix) and price adjusted for oil content (+/- 1.5 per cent of the base price for every 1pc oil above or below 42pc).
“We made this change due to customer requests given the industry typically trades canola using AOF standards” Mr Cattle said.
Commodity trading standards are maintained by Graintrade Australia (GTA) on behalf of industry. Link to the GTA page here for all commodity standards and explanatory memoranda.