UPDATE 1-CBOT grain swaps see slow start in first month

(Updates with quotes from brokers attending industry meeting, paragraphs 10-12)

By Christine Stebbins

CHICAGO, May 7 (Reuters) - The first-ever exchange-cleared grain swap contracts, launched last month by the Chicago Board of Trade to placate an irate grain industry, are off to a slow start amid a cool reception by that industry.

"It will not be and hasn't been an instant-on market," said Diana Klemme, vice president of Grain Service Corp in Atlanta, who supports exchange-cleared swaps but acknowledged that there is a steep learning curve to using the complex deals.

"We're pleased with their progress but intend to grow the business even more ... expand the contract offerings," said CME Group spokeswoman Mary Haffenberg, without giving details.

Swaps are widely used in finance and commodities deals, as two counter-parties make private, tailored deals to exchange income or payment streams and offset risks. But risk of a defaulting counter-party is always possible. Exchange-cleared swaps eliminate that risk, if the parties list their deals.

So far, users have been slow to register deals.

A total of 318 over-the-counter calendar swaps for corn and 200 calendar swaps for soybeans have been listed as of Thursday, a month after CBOT's parent, CME Group (CME.O), launched the clearing venture on April 6. No corn basis swaps have yet been brought to CME.

Both calendar and basis swaps are based on size of CBOT contracts of 5,000 bushels, with users usually also employing grain futures and options to manage swap risks.