Johannesburg Stock Exchange and CME Group introduce CBOT soya bean contracts

Johannesburg Stock Exchange and CME Group introduce CBOT soya bean contracts

On the 17th of May 2010,  Johannesburg Stock Exchange (JSE) listed cash-settled soybean, soymeal and soybean oil derivative contracts based on CBOT settlement prices licensed from CME Group. The new products will allow local farmers, processors and importers to hedge their price risk against the international benchmarks.  These contracts will be listed, traded and settled by the JSE.

The JSE currently trades a physically settled 25 ton soya bean contracts which serves the local market. By adding the cash settled soybean products, local producers especially will have the flexibility to either hedge on the physically settled local market (based on local fundamentals) or the cash settled global market (based on international fundamentals).  The three new standardised soya derivative contracts to be traded on the JSE will represent 100 metric tons for soybeans and soymeal and 25 tons for soybean oil. 

Last year South Africa imported approximately 1 million tons of meal.  “While we do produce soya locally, we import a significant amount of meal to satisfy local animal protein requirements exposing importers and downstream market participants to international price fluctuations,” comments Rod Gravelet-Blondin, Senior General Manager of Commodities at the JSE.

“The fruitful relationship between JSE and CME Group continues to grow with the introduction of three new soybean contracts based on CBOT’s global benchmark prices,” said Bryan Durkin, Chief Operating Officer and Managing Director of Products and Services at CME Group. “With food prices an ever-present challenge for both emerging and established economies, these new contracts underline our commitment to working with our strategic partners worldwide to develop effective risk-management tools.”