MELBOURNE, AUSTRALIA — CME Group announced on July 28 the launch of two new centrally cleared, over-the-counter (OTC) wheat swaps to be denominated in Australian dollars (AUD). 

Pending Commodity Futures Trading Commission (CFTC) review, both the AUD Chicago Soft Red Winter (SRW) Wheat Swap and the AUD KC Hard Red Winter (HRW) Wheat Swap will be available for clearing on CME ClearPort on Aug.12. These contracts will be listed with and subject to the rules and regulations of the CBOT.

"Today, wheat market participants can manage their price risk through the use of our cleared, U.S. dollar-denominated OTC wheat swaps based on the deep, liquid CBOT and KCBT global wheat futures benchmarks," said Nelson Low, executive director, Commodity Products, CME Group. "These new Australian dollar-denominated swaps will enable producers, exporters and other Australian wheat market participants to manage their wheat market exposure in local currency instead of U.S. dollars. Additionally, commercial wheat participants will now have greater flexibility to manage counterparty risk through these cleared OTC swaps."

These new cleared AUD wheat swaps will be approximately one-fifth the contract size of the existing CBOT and KCBT Wheat swap products at 27 tonnes.