LONDON, ENGLAND -- CME Group announced on Sept. 13 that the first E.U. wheat futures contracts were traded on Sept. 12. A total of 411 futures contracts were traded, equaling over 20,000 tonnes.
Trades took place in five delivery months from December 2016 up to December 2017. Open interest for the first day of trading stands at 180 contracts.
"We're pleased to see strong early support for our E.U. wheat futures contract across the curve," said Tim Andriesen, managing director, agricultural products, CME Group. "Today's trading volumes show the formation of healthy levels of liquidity and validate our approach in designing the contract in close collaboration with the industry. We believe this new contract provides our commercial customers with risk management tools that reflect the way they price and hedge their physical contracts."
CME completed in-depth consultation with customers and industry participants, who wanted risk management tools that better reflected physical storage practices in the E.U.
The E.U. wheat futures and options are denominated in euros, priced relative to the Rouen market, and enable users to take delivery of wheat at exchange-approved warehouses in key locations across France or hold onto wheat certificates for delivery at a future date.
The contract encourages a forward price curve similar to those in the CBOT soft red winter and KC hard red winter wheat futures markets, by allowing wheat to be held on a warehouse certificate. This enables E.U. wheat futures to provide effective tracking of the underlying cash market through time, solid convergence, and subsequently, valuable price risk management capabilities.The contract launched with 16 warehouses approved for the delivery of physical E.U. wheat, taking current committed s