News Release

CME Group Announces the Launch of European Union Wheat Futures and Options

Mon Jun 20 2016

LONDON, June 20, 2016 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of physically delivered European Union (EU) Wheat futures and options on futures contracts to begin trading on 12 September 2016, pending all relevant regulatory review periods. These contracts will be listed subject to the rules and regulations of the Chicago Board of Trade (CBOT).

The new EU Wheat futures and options contracts are the result of in-depth consultation with customers and industry participants who want risk management tools that better reflect physical storage practices in the EU. EU Wheat futures and options will be denominated in euros, priced relative to the Rouen market, and will enable users to take delivery of wheat at exchange-approved warehouses in key locations across France or hold onto wheat certificates for delivery at a future date.

"Our Soft Red Winter and Hard Red Winter Wheat futures are the global benchmarks of the physical grain industry, facilitating price discovery and a robust spread market for our customers' hedging needs around the globe," said Tim Andriesen, Managing Director, Agricultural Products, CME Group. "The addition of these new EU Wheat contracts to our existing suite of Wheat futures and options further positions CME Group and our CME Globex trading platform as the global destination for wheat trading and risk management."

EU Wheat futures will combine CBOT's warehouse delivery mechanisms with European trading practices to offer an efficient hedging tool to market participants. At the same time, wheat traders will benefit from arbitrage opportunities and margin offsets between EU Wheat futures and options and the existing suite of Wheat futures and options. Global wheat participants already have access to futures and options on all three North American wheat benchmarks through the CME Globex electronic trading platform.

"We were requested to be actively involved in the development of these contract specifications, and believe they will be well aligned with our hedging strategies," said Steve Campbell, Head of Grains for the North America region at Louis Dreyfus Company. "As a leading global merchant and processor of agricultural goods, we closely monitor international agricultural markets to effectively manage price volatility throughout the supply chain. CME Group's new EU Wheat contracts, together with the Chicago Soft Red Winter and KC Hard Red Winter Wheat products, will be additional valuable tools to enable liquidity, helping us to manage global wheat price volatility better across our operations."

Delivery of wheat against the contract will take place via the issuance of a warehouse certificate linked to approved warehouses located in the major wheat producing areas of France. Firms receiving certificates will have the flexibility to either re-deliver the certificates against futures; give notice of load-out of the physical wheat or hold the certificate for future load-out from the issuing warehouse in return for paying administrative fees. This will encourage the creation of a forward curve for EU wheat.

Each contract will represent 50 metric tonnes of physical EU wheat with quality specifications set at a minimum of 10.5 percent protein and 170 hagberg. The first listed month will be the December 2016 delivery month with a further seven delivery months also being made available for trading.

EU Wheat futures and options contracts will be available for trading electronically via CME Globex Monday through Friday between 10:30 a.m. and 6:35 p.m. Paris time. EU Wheat options will also be available for trading on the company's Chicago trading floor from 8:30 a.m. to 11:35 a.m. Chicago time.

At present, 12 warehouses have applied for approval for the delivery of physical EU wheat against the contract.

CME Group will be hosting two conference calls this afternoon for the media, in both English and French, at 14.00pm BST and 14.30am BST respectively, featuring representatives from our Agricultural Products team. The dial-in details are as follows:

14.00pm BST: English language call

Conference ID:

5955407

International dial-in: +1 913 312 0387

France: +33 1 70 71 29 52

Germany: +49 69 3339 9503

United Kingdom: +44 20 8150 0795

14.30pm BST: French language call

Conference ID:

4828373

International dial-in: +1 913 661 9178

France: +33 1 70 71 29 52

Germany: +49 69 3339 9503

United Kingdom: +44 20 8150 0795

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. Around the world, CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its exchanges based in Chicago, New York and London. CME Group also operates one of the world's leading central counterparty clearing providers through CME Clearing and CME Clearing Europe, which offer clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives. CME Group's products and services ensure that businesses around the world can effectively manage risk and achieve growth.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT, the Chicago Board of Trade, KCBOT, KCBT and Kansas City Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.

 

SOURCE CME Group

Felicity Press, +44.20.3379.3386, Chris Grams +1.312.930.3435, news@cmegroup.com, www.cmegroup.mediaroom.com; or Investor Contact: John Peschier, 312.930.8491

Corporate Communications

+1 312 930 3434
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