CME Group, the world's leading and most diverse derivatives marketplace, announced that it is launching South American soybean (Platts) futures on Sept. 21, 2020, pending all relevant regulatory review periods. This contract will offer market participants a new tool to directly manage exposure to the Brazilian soybean market.
"As Brazil has emerged as a leading producer and exporter of soybeans, regional pricing alternatives have become increasingly important for risk management," said Tim Andriesen, CME Group managing director of Agricultural Products. "Customers have been using our benchmark grain and oilseed products to hedge their global soybean positions for over 80 years, and these new contracts will enhance those products with contracts that reflect Brazilian export prices."
The new South American soybean (Platts) futures were jointly developed with B3, one of the world's largest financial market infrastructure companies. Brazilian soybean futures will be financially settled based on the SOYBEX price assessment published daily since July 2018 by S&P Global Platts, reflecting the FOB value of soybeans from the port of Santos in Brazil. The contract will simultaneously track the export price and the basis to U.S. soybeans, offering market participants the ability to trade the spread between these key commodity regions.
Louis Gourbin, head of Commodities at B3, stated, "To B3, the launch of this contract is a collective success and another major step in our strategic relationship with CME Group. We are working to make the B3 contract available to the market as soon as possible.”
Ian Dudden, S&P Global Platts global pricing director, metals and agriculture, said, "We are pleased that CME Group and their customers recognize the important role our independent Brazil FOB Santos soybean price assessment plays in creating price transparency, which, in turn, provides opportunities for the provision of risk management tools that bring greater efficiency to the global agriculture markets."
South American soybean futures will be quoted in U.S. dollars and cents per metric ton and will have a contract size of 136 metric tons. The minimum price fluctuation will be 20 cents/mt, with the final settlement price rounded to the nearest 1 cent. The new futures contract will be available for trading on CME Globex or through block trades via CME ClearPort and will be listed by and subject to the rules and regulations of the Chicago Board of Trade.