Frequently Asked Questions: Ukrainian Wheat (Platts) Futures and Options

1. What product is being launched and when?

CME Group is launching Ukrainian Wheat (Platts) futures and options contracts on the CBOT exchange.

The Ukrainian Wheat (Platts) futures contract size is 50 tonnes and quoted in US dollar and cents per tonne. The contract tick size is $0.25 per tonne and tick value is $12.50. The commodity code is UWF.

The Ukrainian Wheat (Platts) options contract size is 50 tonnes and quoted in US dollar and cents per tonne. The contract tick size is $0.05 per tonne and tick value is $2.50. The commodity code is UWO.

The first trading day is 12 April 2021; May 2021 will be the first listed month available for trading and clearing.

More details on the contracts available by clicking here.

2. What is the regulatory jurisdiction of the Ukraine Wheat (Platts) futures and Options contracts?

The contracts are listed in the US by CBOT and cleared in the United States by CME Clearing. The regulator is the CFTC.

3. What is the underlying reference price?

The Ukrainian Wheat (Platts) futures and options contracts are based on the “Ukraine Wheat 11.5% Fob Black Sea” price assessment published by Platts. The Platts code for the assessment is WUBSA00 and the price is published in USD per metric ton.

4. What is the Platts Ukraine Wheat FOB Black Sea assessment?

Price assessments reflect Ukraine origin, soft wheat with a protein content of 11.5%, a minimum test weight of 77 kg/hl, a maximum moisture content of 14%, a minimum wet gluten content of 23%, a minimum W number of 160, a minimum falling number of 230 seconds, maximum bug damage of 2%, 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 Ukraine origin 11.5% protein.

The assessments reflect cargo sizes from handy size to Panamax size, FOB Odessa, Pivdennyi, and Chornomorsk (POC), loading 28 to 42 days ahead of date of publication. Cargoes are normalized to reflect parcels of 25,000 metric tonnes, with operational tolerance as per standard market practice. In the absence of representative, FOB POC 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 POC.

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

The Final Settlement Price for Ukraine Wheat (Platts) futures is equal to the arithmetic average of the Ukraine Wheat 11.5% Fob Black Sea assessments published by Platts for each day of the full calendar month period, rounded to the nearest $0.01.

6. What is the relationship between options on Ukrainian Wheat (Platts) futures and Ukrainian Wheat (Platts) futures?

Options on Ukrainian Wheat (Platts) futures are American style expiry options and may be exercised by the buyer on any Exchange business day. The options give the buyer of a call/put the right to buy/sell one Ukrainian wheat (Platts) futures contract at a specified strike price. Upon termination of trading, in-the-money options expire into 1 Ukrainian Wheat (Platts) futures contract. An option that is in-the-money and has not been exercised or liquidated prior to the expiration day shall be exercised automatically. 

7. Are there price limits?

Yes, there are price limits.

8. How can the futures and options 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 and options contracts are available to trade as a block. How does it work?

Subject to certain requirements met, such as 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 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.

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. 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 to Friday 7:00 p.m. to 1:20 p.m. CT.

12. Are trades executed at 1:30 pm US Central Time for today or tomorrow’s trade?

All trades executed through 4:00 p.m. US CT will be considered today’s trade.

13. What are the position limits?

All trades executed through 4:00 p.m. US CT will be considered today’s trade.

14. What is the listing schedule?

The Ukrainian Wheat (Platts) Futures are listed over 15 consecutive calendar months. The Options on Ukrainian Wheat (Platts) Futures will be listed for 12 consecutive calendar months.

15. 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.

16. 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.
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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