In September 2020, CME Group is launching a cash-settled (Platts) South American Soybean futures contract (ticker SAS), which provides a regionally specific risk-management tool for global market participants looking to hedge their flat price exposure or basis risk. This new contract will be listed on CBOT and has the backing of CME Clearing, mitigating counterparty risk.
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). SAS futures are traded in dollars and cents per metric ton, with a tick size of $0.20 per metric ton ($27.20/contract). The contract months align with CBOT futures contract months, with the addition of a February contract month to address the South American new crop season. The contract hours match the legacy CBOT futures contract daytime (or RTH) hours and will be available for trading on CME Globex and CME ClearPort.
Spread trading between the US and South American Soybean contracts can be readily done on the Globex platform and via blocks on ClearPort. Margin offsets will be available between the two CME Group contracts.
The addition of the new Soybean futures contract will facilitate basis risk management that currently does not exist unless a market participant has 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.
SAS futures are cleared by CME Clearing. CME Group 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 unit||136 metric tons (MT)|
|Minimum price fluctuation||$0.20 per ton ($27.20 per contract)|
|Trading hours||CME Globex: 8:30 a.m. – 1:20 p.m. CT Monday through Friday
CME ClearPort: Sunday opens 5:00 p.m.
Monday – Friday: Closes each day at 5:45 p.m.
Monday – Thursday: Opens each day at 6 p.m.
|Product code||CME Globex: SAS
CME ClearPort: SAS
|Listed contracts||January, February, March, May, July, August, September, and November with 11 contracts listed at any time.|
|Floating price||The arithmetic average of the “SOYBEX FOB Santos” price assessment published by Platts for each day that it is determined from and including the 16th calendar day in the 2nd month prior to the contract month to and including the 15th calendar day in the month prior to the contract month. The Floating Price shall be rounded to the nearest $0.01.|
|Daily settlement for forward contracts||Globex VWAP – 5 minutes.|
|Termination of trading||Trading shall cease on the business day prior the 16th calendar day in the month prior to the contract month.|
|Exchange rulebook||CBOT 11F|
|Block Minimum||5 contracts|
|Inter-commodity spread block minimum||20 contracts|
|Reporting Window||15 minutes|
|Settlement method||Financially settled|
Complementing the CBOT South American Soybean contract is a B3-owned Brazilian soybean contract. For more on that contract, visit www.b3.com.br/en_us.
To learn more about South American Soybean futures offered by CME Group, visit www.cmegroup.com/sa-soybeans.
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Get more information about the South American Soybean futures contracts at CME Group.