PARIS, Sept 9 CME Group has finalised
agreements to add more delivery points for its European Union
wheat futures, with 16 silos now lined up in northern France
ready for Monday's launch, it said on Friday.
CME, which owns the Chicago Board of Trade (CBOT), is
entering the world's biggest wheat production area in a
challenge to the European benchmark status of Euronext's
milling wheat contract.
CME is pitching to European traders with a planned network
of inland sites and a system of transferable storage
certificates. Euronext uses a small number of port silos.
CME has signed off deals this week with three more silos,
one run by Semmap and another two by Valfrance, taking total
committed storage capacity for its EU wheat futures to around
400,000 tonnes, Jeffry Kuijpers, executive Director,
agricultural commodities, at CME, told the Thomson Reuters
online Global Ags Forum.
The group has just finalised an agreement to add another
silo owned by major grain cooperative Axereal, one of whose
sites was also in an initial list of 12 silos published by CME
in June when it announced the launch of its European Union
Kuijpers confirmed that CME will allow investors trading the
new futures to offset margin requirements against its U.S. wheat
and corn futures, and that it had enlisted undisclosed partners
to act as market makers, to encourage liquidity by proposing
bids and offers for different futures positions.
New agricultural derivatives often struggle for liquidity,
as shown by the failure of CME's Black Sea wheat and Euronext's
premium wheat futures to take off in recent years.
(Reporting by Gus Trompiz; Editing by Ruth Pitchford)