CME to introduce Australian wheat Futures FOB contract

Grain Central July 11, 2017


TRADERS, farmers and agricultural market speculators may have a new hedging platform from July 24 if regulators approve plans for the Australian Wheat FOB (Platts) futures contract.

A proposed Australian Wheat FOB (Platts) futures contract would complement Chicago Mercantile Exchange (CME) Group’s existing global wheat benchmarks, including Euro-denominated EU Wheat, Soft Red Winter Wheat, Hard Red Winter Wheat and Black Sea Wheat futures and options contracts, and would offer an alternative to the existing Australian Securities Exchange (ASX) Australian wheat futures contracts.

“A significant amount of Australian wheat is sold overseas to markets in the Middle East and Asia, and with this new contract, international traders can now take exposure to export prices of Australian wheat without having to take physical delivery,” CME Group agricultural products executive director, Nelson Low, said.

“The addition of this new Australian wheat futures contract to our already robust suite of global wheat benchmarks increases our capacity to provide a convenient one stop venue for all wheat risk management needs, and the platform for market participants to create spreading opportunities with other CBOT wheat contracts,” he said in a statement.

Pricing benchmark is the key

London-based S&P Global Platts, energy and commodities information provider across many markets, would participate in the benchmarking for Australian FOB wheat.

The company began publishing prices of Asia-Pacific wheat markets in 2015.

“We believe the marketplace benefits from price formation and risk management tools that reflect regional fundamentals and welcome this recognition by CME Group of the role our price assessments can play in bringing greater transparency and efficiency to global grains markets,” S&P Global Platts global content director, agriculture, Ian Dudden, said.


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