- What product is being launched and when?
- What is the product code?
- What is the regulatory jurisdiction of Canadian Wheat futures contracts?
- What is the underlying reference price?
- What is the Platts CWRS Wheat FOB Vancouver assessment?
- How are the final settlement prices of the futures contracts determined?
- Are there price limits?
- How can these futures contracts be traded?
- The futures contracts are available to trade as a block. How does it work?
- What are the requirements for block trades?
- Is crossing permitted?
- What are the hours for trade entry on CME ClearPort and on CME Globex?
- Will trades executed at 1:30 p.m. U.S. Central Time be attributed to today or tomorrow’s trade date?
- What are the position limits?
- What is the listing schedule?
- I am a bona-fide hedger and I need to exceed position limits. Can I apply for a hedge exemption?
- How do I start trading this contract?
- I have more questions. Who can I contact?
1. What product is being launched and when?
CME Group is launching Canadian Wheat futures on the CBOT exchange.
The Canadian Wheat futures contract size is 50 metric tons and quoted in U.S. dollars and cents per metric ton. The contract tick size is $0.25 per metric ton and tick value is $12.50.
The first trading day is June 13, 2022. September 2022 will be the first listed month available for trading and clearing.
2. What is the product code?
The product code is CWR.
3. What is the regulatory jurisdiction of Canadian Wheat futures contracts?
The contracts are listed in the U.S. by CBOT and cleared in the U.S. by CME Clearing. The regulator is the CFTC.
4. What is the underlying reference price?
Canadian Wheat futures contracts are based on the CWRS (Canadian Western Red Spring) Wheat FOB Vancouver price assessment for loadings 30-45 days forward published by Platts. The Platts code for the assessment is AWHCD00 and the price is published in USD per metric ton.
5. What is the Platts CWRS Wheat FOB Vancouver assessment?
Assessments reflects Number 2 Canada Western Red Spring (No. 2 CWRS) wheat with a protein content of 13.5%, a minimum test weight of 78 kg/hL, a maximum moisture content of 14.5%, a maximum vomitoxin of 2 ppm, a minimum Falling Number of 300 seconds all other specifications are as stated by the Canadian Grain Commission. Wheat with a higher or lower protein content may be considered but normalized back to 13.5% protein.
Assessments reflect partial cargoes to full Panamax cargoes; 20,000 MT to 60,000 MT, plus or minus 10% operational tolerance. Basis and location are FOB Vancouver, Canada.
6. How are the final settlement prices of the futures contracts determined?
The final settlement price for Canadian Wheat futures is equal to the arithmetic average of the CWRS Wheat FOB Vancouver assessment published by Platts from the 1st to the 15th of the prior month, rounded to the nearest $0.01.
7. Are there price limits?
Yes, price limits will be $90/MT, expandable to $135/MT.
8. How can these futures contracts be traded?
The contracts are available for trading on the CME Globex electronic trading platform and for submission for clearing via CME ClearPort.
9. The futures contracts are available to trade as a block. How does it work?
Subject to certain requirements such as eligibility and minimum size, the futures contract can be privately negotiated via brokers as a block trade and submitted into CME ClearPort for clearing.
10. What are the requirements for block trades?
There are minimum quantity and reporting time requirements. The minimum block size is five lots, and trades need to be reported within 15 minutes of execution.
Firms need to be classified as an Eligible Contract Participant (ECP) to engage in block trades. The definition of ECP can be found in Section 1a(18) of the Commodity Exchange Act.
11. Is crossing permitted?
Yes. As with all CBOT Grain futures, committed cross (C-Cross) and Globex cross (G-Cross) are permitted futures crossing protocols for participants who engage in pre-execution communications pursuant to Rule 539. Pre-execution communications allow for size, price, and direction to be discussed prior to the entry of orders into CME Globex.
12. What are the hours for trade entry on CME ClearPort and on CME Globex?
Trades may be entered on CME ClearPort Sunday 5:00 p.m. to Friday 5:45 p.m. CT with no reporting available Monday to Thursday from 5:45 p.m. CT to 6:00 p.m. CT.
Trades maybe entered on CME Globex Sunday – Friday: 7:00 p.m. – 7:45 a.m. CT and Monday – Friday: 8:30 a.m. – 1:20 p.m. CT..
13. Will trades executed at 1:30 p.m. U.S. Central Time be attributed to today or tomorrow’s trade date?
All trades executed through 4:00 p.m. U.S. Central Time will be considered today’s trade date.
14. What are the position limits?
Canadian Wheat futures will have a spot month limit of 2,000 contracts. Single- and all-month accountability levels are both set at 2,000 contracts.
15. What is the listing schedule?
Canadian Wheat futures contract months match those of Chicago and KC Wheat; March, May, July, September, and December. Six total contracts will be listed and available for trade at any given time.
16. 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.
17. 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 any of the inter-dealer brokers (IDBs) that service this market and they will guide you along.
Step 1: Register on CME ClearPort.
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 for additional assistance.
18. I have more questions. Who can I contact?
Agricultural Options Update
View an update of Agricultural options, including volatility curves, recent volume, options spreads, and more.
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.