EU: Euronext planning futures contracts for durum wheat and feed barley next year

Euronext plans to launch futures contracts for durum wheat and animal-feed barley next year, extending its coverage of agricultural markets, the European exchange’s head of commodities said on November 13.

Euronext is developing cash-settled contracts, without physical delivery, for several agricultural products, with the key ones being durum and feed barley, Nicholas Kennedy told Reuters.

The move is in line with plans Euronext outlined last month to use cash settlement to expand a commodity business that currently offers physical delivery of crops like wheat.

Instead of using delivery at the expiry of futures to connect them with physical markets, cash settlement uses a physical price benchmark.

“There is demand for products that are simpler but with the same security,” Kennedy said on the sidelines of the Global Grain conference.

“We are going to do these contracts for feed barley and durum.”

The timing of the launch next year would depend on when a new trading platform being developed by Euronext was up and running, he said.

Euronext would work with a partner to obtain price benchmarks for durum and feed barley but it was too early to give details, he added.

Euronext previously made an unsuccessful attempt to develop a futures market for malting barley, the variety used to make beer ingredient malt, while other market operators have also failed to attract liquidity for durum futures.

Its commodity business is dominated by its milling wheat futures, which are a benchmark for the European grain market.

14 November, 2019