CME Group, the world’s leading and most diverse derivatives marketplace, today announced that the first EU Wheat futures contracts were traded on Monday, September 12, 2016. A total of 411 futures contracts were traded, equaling over 20,000 metric tons. Trades took place in five delivery months from December 2016 up to December 2017. Open interest for the first day of trading stands at 180 contracts.
“We’re pleased to see strong early support for our EU Wheat futures contract across the curve,” said Tim Andriesen, Managing Director, Agricultural Products, CME Group. “Today’s trading volumes show the formation of healthy levels of liquidity and validate our approach in designing the contract in close collaboration with the industry. We believe this new contract provides our commercial customers with risk management tools that reflect the way they price and hedge their physical contracts.”
The contract encourages a forward price curve similar to those in the CBOT Soft Red Winter and KC Hard Red Winter Wheat futures markets, by allowing wheat to be held on a warehouse certificate. This enables EU Wheat futures to provide effective tracking of the underlying cash market through time, solid convergence, and subsequently, valuable price risk management capabilities.
The contract launched with 16 warehouses approved for the delivery of physical EU wheat, taking current committed storage capacity to around 400,000 metric tons.