Grain News


CME Group Announces Launch of Black Sea Wheat Futures Contract

Date Posted: April 18, 2012

Kiev, Ukraine and Chicago—CME Group, the world's leading and most diverse derivatives marketplace announced April 18 the launch of CBOT Black Sea Wheat Futures to begin trading on June 6, subject to regulatory approval.

The launch of these contracts, which will be listed with, and subject to, the rules and regulations of the CBOT, is an extension of the MOU that was initiated by CME Group Chairman Emeritus Leo Melamed last year.

Global Wheat Markets at a Glance

"This is an important next step for CME Group as it relates to our new market development efforts in Eastern Europe," said Melamed.

"Now more than ever the world relies on the Black Sea region to produce wheat and other grains to meet our growing global demand for food," said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group.

"That's why beginning in June, CBOT Black Sea Wheat Futures will become the first hedging tool to offer regional market participants effective price discovery and risk management.

"We firmly believe this contract will not only establish an effective forward market for regional wheat prices, but has the potential to develop into a true regional benchmark pricing tool for wheat."

Today, wheat is the world's most internationally traded agricultural commodity with wheat exports at almost 140 million metric tons globally.

In recent years, wheat produced in the Black Sea region has accounted for more than 20 percent of global exports.

This resurgence, coupled with increased price volatility in the region has underscored the need for an effective hedging tool with strong correlation to the Black Sea wheat cash market.

CME Group has worked closely with regional partners, industry associations and several other key market participants to develop the region's first wheat futures contract that truly represents physical grain prices, addresses specific delivery practices and regional risk factors like weather.

Pending all relevant regulatory review periods, Black Sea Wheat Futures will be listed on CBOT and available for trading electronically on the world's leading wheat-trading platform, CME Globex, beginning with the first listed month of July 2012.

The contract will be U.S. Dollar denominated and will be 136 metric tons per contract, similar to benchmark CBOT Wheat futures.

Designated delivery points for the contract will be in Russian, Ukrainian and Romanian ports on the Black Sea.

The introduction of the Black Sea Wheat Futures contract further enhances CME Group's already broad range of hedging and trading tools for managing exposure to wheat price risk around the globe.

For more information about Black Sea Wheat Futures, please visit www.cmegroup.com/bsw.

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