Cash-settled (Platts) South American Soybean futures (SAS) provide a specific risk management tool for global market participants looking to hedge their flat price exposure or basis risk in Brazil. This contract is listed on CBOT and has the backing of CME Clearing, mitigating counterparty risk.
Key benefits
- A more effective hedge for South American producers, exporters and importers of Brazilian soybeans ‒ as it reflects export price at the Port of Santos
- An opportunity to trade the spread between North American and South American soybeans, and effectively, the South American soybean basis
- Available for screen trading on CME Globex or block trading reported via CME ClearPort
Key contract features
At 136 metric tons per contract, the South American Soybean (SAS) futures contract is equivalent in size to the existing CBOT Soybean futures contract (ZS). The SAS futures are financially settled and traded in dollars and cents per metric ton, with a tick size of $0.20 per metric ton ($27.20/contract). The contract hours align with ZS futures, with the SAS having all twelve months listed. The contract is available for trading on CME Globex and CME ClearPort.
Spread trading
Spread trading between benchmark CBOT Soybean (ZS) and South American Soybean (SAS) contracts can be readily done via legging in contract months on the Globex platform with pre-defined spreads and via blocks on ClearPort. Margin offsets are available between the two contracts.
Managing US versus Brazilian basis risk
The SAS futures contract facilitates basis risk management that was not available for market participants unless they had access to the physical market in Brazil. One could be long or short the Brazilian basis by using both the SAS and ZS contracts. A market participant that wants to be long the Brazilian basis could buy SAS and sell ZS. Conversely, a market participant that wants to be short the basis could sell SAS and buy ZS.
South American Soybean futures are cleared
SAS futures are cleared by CME Clearing. CME Clearing is the central counterparty to all trades, thereby protecting customers from default and subsequent losses. This is not the case with OTC/bilateral trades between two parties, where there is no protection from default.
Contract specifications*
| Contract Unit |
136 metric tons |
|---|---|
| Price Quotation |
U.S. dollars and cents per metric ton |
| Trading Hours |
CME Globex: Monday - Friday: 8:30 a.m. - 1:20 p.m. CT CME ClearPort: Sunday 5:00 p.m. - Friday 5:45 p.m. CT with no reporting Monday - Thursday from 5:45 p.m. - 6:00 p.m. CT |
| Minimum Price Fluctuation |
0.20 per metric ton = $27.20 |
| Product Code |
CME Globex: SAS CME ClearPort: SAS Clearing: SAS |
| Listed Contracts |
18 monthlies |
| Settlement Method |
Financially Settled |
| Floating Price |
The Floating Price for each contract month shall be equal to the arithmetic average of the “SOYBEX FOB Santos - Platts Symbol SYBBB00 ” price assessment published by Platts for each day that it is determined during the calculation period. The Floating Price shall be rounded to the nearest $0.01. |
| Termination of Trading |
Trading terminates on the business day prior to the 16th calendar day of the month prior to the contract month. |
| Settlement Procedures | |
| Position Limits | |
| Exchange Rulebook | |
| Block Minimum | |
| Price Limit or Circuit | |
| Vendor Codes |
*Complementing the CBOT South American Soybean contract is a B3-owned Brazilian soybean contract.
For more information, visit: www.b3.com.br/en_us/
To learn more about South American Soybean futures offered by CME Group, visit cmegroup.com/sa-soybeans
Frequently Asked Questions
Get more information about the South American Soybean futures contracts at CME Group.
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.
