1. What is the underlying reference price?

The Australian Wheat FOB (Platts) Futures contract (Product Code: AUW) is based on the price assessment “APW Wheat FOB Australia” published by Platts.

2. What is the Platts APW Wheat FOB Australia?

Platts APW Wheat FOB Australia reflects the spot physical price for Australian wheat exports.

This price assessment represents the daily tradable value  of Australian Premium White (APW) wheat, with a minimum of 10.5% protein (on an 11% moisture basis), a maximum of 12.5% total moisture, a minimum falling number of 300 seconds and a typical flour wet gluten of 24.5%. 

Other grades of milling wheat are normalized to APW, making Platts APW wheat assessment a suitable proxy for the whole sector. 

Platts APW Wheat FOB Australia predominantly reflects export spot transactions from Western and Southern Australia. Exports from other Australian locations may  still be monitored for pricing consistency. Also it encompasses trade data from across Asia and the Middle East, with transactions agreed on a CFR basis normalized back to FOB using prevailing spot freight rates.

The assessment’s volume, location, and timing, reflect typical Australian wheat exports, normalized to 30,000 mt loading in Kwinana, Western Australia, in 60-90 days. It is assessed in US dollars per metric ton at a daily timestamp of 1630 Singapore time.

3. How is the final settlement price of the futures contract determined?

The final settlement price is equal to the arithmetic average of the price assessment “APW Wheat FOB Australia” published by Platts for each day that it is determined during the contract month, rounded to the nearest $0.25 increment. Final settlement shall be accomplished by cash settlement. Payment is made or received through the Clearing House in accordance with normal settlement procedures based on the final settlement price. Final Settlement Example: CME Australia Wheat FOB (Platts) Futures December 2016 Contract

Date Platts APW Wheat FOB Australia  Assessment Price
12/1/2016 $197
12/2/2016 $197
12/5/2016 $196
12/6/2016 $195.5
12/7/2016 $195
12/8/2016 $199
12/9/2016 $200
12/12/2016 $198.5
12/13/2016 $200
12/14/2016 $200
12/15/2016 $201
12/16/2016 $200.5
12/19/2016 $200
12/20/2016 $197
12/21/2016 $197.5
12/22/2016 $197
12/23/2016 $198
12/27/2016 $198
12/28/2016 $198
12/29/2016 $196.5
12/30/2016 $196.5
Average/Final Settlement $198

4. Are there price limits?

There are no price limits for contract month up to March 2018. For April 2018 contract month and beyond, the daily price limit is initially set at $40 per metric tons for all non-spot months. Daily price limits will be reset every six months on the first trading day in May and the first trading day in November. For the May reset, daily settlement prices are collected for the nearest June contract month over 45 consecutive trading days before and on the business day prior to April 16th. For the November reset, daily settlement prices are collected for the nearest December contract month over 45 consecutive trading days before and on the business day prior to October 16th. The average of these daily settlement prices is calculated, and the new daily price limit shall be 20% of this average price rounded to the nearest $5.

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

For example, with certain requirements met, the futures contract can be privately negotiated as block trades 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 contracts, 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. CT will be considered today’s trade.

9. What are the Position Limits?

The Australian Wheat FOB (Platts) Futures has a Spot Month Limit of 2,000 contracts. Single Month Accountability Level and All Month Accountability Level are both set at 3,000 contracts.

10. What is the listing schedule?

The Australian Wheat FOB (Platts) Futures is listed for 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 this  contract depending on your situation, but this is the simplest and most straightforward process. Contact GAMAsia@cmegroup.comor any of the Inter Dealer Brokers (IDBs) that service this market and they will guide you along.

Step 1: Register on CME Clearport

Contact: GAMAsia@cmegroup.com

Step 2: Appoint an Inter Dealer Broker (IDB) that services this market

McDonald Pelz IB LLC
Andrew Rechten
+44 2038 765309

Ian Pelz
+1 303 4832835

Ian Hartford
+65 6911 1092

Nick Orssich
+61 2809 42005

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: GAMAsia@cmegroup.com


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All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.

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