Frequently Asked Questions Black Sea Wheat Financially Settled (Platts) Futures

1. What is the underlying reference price?

The Black Sea Wheat Financially Settled (Platts) Futures contracts are based on the “Russian Wheat 12.5% Fob Black Sea Deep Water” price assessment published by Platts.

2. What is the Platts Black Sea Wheat FOB Russia assessment?

Price assessments reflect Russian origin, soft wheat with a protein content of 12.5%, a minimum test weight of 77 kg/hl, a maximum moisture content of 14%, a minimum wet gluten content of 25%, a minimum W number of 180, a minimum falling number of 250 seconds, maximum bug damage of 1.5% and maximum foreign matter content of 2%. Wheat of other origin or with higher or lower protein content may be considered, but normalized back to Russian origin 12.5% protein.

The assessments reflect cargo sizes from handy size to Panamax size, FOB Novorossiisk, loading 28 to 42 days ahead of date of publication. Cargoes are normalized to reflect parcels of 25,000 metric tons, with operational tolerance as per standard market practice. In the absence of representative, FOB Novorossiisk price information, Platts may also refer to other Black Sea ports or CFR prices in relevant destinations and will use prevailing spot freight rates and origin adjustments to normalize to FOB Novorossiisk.

3. How are the final settlement prices of the futures contracts determined?

CME Group are making available two Black Sea Wheat contracts that cover different settlement period:

  • Black Sea Wheat Financially Settled (Platts) Futures. Basis a Final Settlement Price equal to the arithmetic average of the Russian Wheat 12.5% Fob Black Sea Deep Water price assessments published by Platts for each day of the full calendar month period, rounded to the nearest $0.01.
  • Black Sea Wheat Financially Settled (Platts) Half Month Futures. Basis a Final Settlement Price equal to the arithmetic average of the Russian Wheat 12.5% Fob Black Sea Deep Water price assessments published by Platts for each day of the half month period, rounded to the nearest $0.01.

4. Are there price limits?

Yes, there are price limits. These are set at US$40 on the first trading day.

5. The futures contract is available on ClearPort for submission for clearing. How does it work?

Subject to certain requirements met, such as minimum size, the futures contract can be privately negotiated as a block trade and registered through ClearPort for clearing.

6. What are the requirements for block trade?

There are minimum quantity and reporting time requirements. The minimum block size is 5 lots, and trades need to be reported within 15 minutes of execution.

7. What are the hours for trade entry on CME ClearPort for clearing?

Trades may be entered on CME ClearPort Sunday – Friday from 5:00 p.m. to 4:00 p.m. CT, with a 60-minute pause each day from 4:00 p.m. to 5:00 p.m. CT.

8. Are trades executed at 1.30 pm US Central Time for today or tomorrow’s trade?

All trades executed through 4:00 p.m. U.S. Central Time will be considered today’s trade.

9. What are the Position Limits?

The Black Sea Wheat Financially Settled (Platts) Futures Contracts will have a combined Spot Month Limit of 2,500 contracts. Single Month Accountability Level and All Month Accountability Level are both set at 3,000 contracts.

10. What is the listing schedule?

The Black Sea Wheat Financially Settled (Platts) Futures are listed over 12 consecutive months.

11. I am a bona-fide hedger and I need to exceed Position Limits. Can I apply for a hedge exemption?

Yes, you can apply for a hedge exemption. Market participants may be eligible to receive an exemption from Position Limits in accordance with Rule 559 based on having bona fide hedging positions (as defined by CFTC Regulation §1.3(z)(1)), risk management positions and/or arbitrage and spread positions. To obtain an exemption application or for further information on the exemption application process, please contact us at Hedgeprogram@cmegroup.com.

12. How do I start trading this contract?

There are various ways you can begin trading these contracts depending on your situation, but this is the simplest and most straightforward process. Contact blacksea@cmegroup.com or any of the Inter Dealer Brokers (IDBs) that service this market and they will guide you along.

Step 1: Register on CME Clearport Contact: blacksea@cmegroup.com
Step 2: Appoint an Inter Dealer Broker (IDB) that services this market
Step 3: Request your CME Group Clearing Firm to permission your chosen IDB for trade submission.

Contact your Clearing Firm or for more help, contact: blacksea@cmegroup.com

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