First-ever Black Sea wheat swap settled against an index trades at $188/mt for April


The first-ever over-the-counter swap for Black Sea wheat settled against a spot price index traded Friday, an April contract priced at $188/mt, Joachim Emanuelsson, chief operating officer of SCB & Associates, the firm which brokered the deal, told S&P Global Platts Monday.

The trade is a significant milestone in the evolution of the Black Sea wheat market, for which hedging has historically been done either on Chicago Board of Trade futures or on Euronext's Matif French milling wheat futures.

The swap will be settled against the April average of Platts Black Sea Wheat price assessment. This assessment reflects Black Sea wheat exports, normalized to a standard definition Russian 12.5% protein, loading on a FOB Novorossiysk basis in 28-42 days.

This development comes just a few months after trading firms Cargill and Louis Dreyfus Company concluded the first Australian cash-settled wheat swap, which is being settled against Platts' Australian Premium White (APW) price assessment.


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