Grains

ASX new Eastern Australia wheat contracts gain pace

Henry Wells, November 16, 2016

AUSTRALIAN stock exchange (ASX) grain contracts have recently seen a surge in volume as the wheat harvest in Australia gathers pace.

ASX manager, commodities sales, Kristen Hopkins, told Grain Central strong volumes of wheat contracts had traded in the first two weeks of November.

“In the ten trading days to 15 November ASX wheat contracts traded 6,213 lots.  At 20 tons per lot this is over 12,000 tons per day equivalent,” Mr Hopkins said.

ASX re-designed its wheat contracts in October 2015 and launched the new Eastern Australia Wheat futures and options contracts, replacing the existing NSW Wheat contract, the last expiry of which will be the January 2017 NSW Wheat contract.

The Eastern Australia Wheat Futures contract is similar to the outgoing NSW Wheat contract (APW1, 20MT lot size).

The key difference is the expansion of the delivery arc beyond NSW (Newcastle and Port Kembla port zones) to include the port zones of Brisbane, Melbourne and Geelong.

“This provides increased flexibility to deliver wheat across a wider geographical area,” Mr Hopkins said.

Wheat is grown, domestically-consumed and exported from all of the geographic regions covered by the contract’s delivery zones, which makes the contract more relevant to a wider range of end users.

“We have launched the new website, link here, so customers can monitor live futures prices. Growers should understand what the bid price means to them.  ASX is a way to sell forward, (crop 2016, 2017 and 2018 contracts are listed at the moment), it’s transparent, it’s anonymous and reduces counterparty risk as the ASX clears all trades,” he said

Further details can be viewed at the ASX products website here.

The Eastern Australia wheat futures contract is deliverable at any approved bulk handler up-country site with rail and road outload capability tributary to Brisbane, Newcastle, Port Kembla, Melbourne or Geelong.

The grade minimum is APW1 listed as GTA CSG-103 standard.  The settlement price on the Notice Day is adjusted for GTA location differential, shrinkage, receival fee and GST.

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