Grain Futures & Options

Grain Futures give investors the opportunity to hedge agricultural price risk. A futures contract is a legally binding agreement that gives the investor the right to buy or sell an underlying commodity at a fixed price on a future date. The JSE offers Futures on White Maize, Yellow Maize, Wheat, Sunflower Seeds and Soya Beans and Sweet Sorghum. Options  contracts are also available.

Benefits

• Secure, affordable and flexible instrument to manage your companys agricultural price risk
• Avoid losses due to non-performance by counter parties in the OTC (over the counter) market
• Price discovery is possible in a transparent environment with trading taking place on an electronic platform
• Physical delivery is an alternative. The process is secure and efficient with payment received within two business days of delivery
• Procurement of physical product is possible and is guaranteed by an approved silo operator

Who should use this product?

• Hedgers seeking to reduce risk by protecting themselves against adverse price movements in the physical market
• A typical hedger would be a producer, end user, financier or trading house involved in physical product
• Speculators hoping to make a profit on short-term movements in the futures contract price

How to use this product?

• Register as a client with an authorised member firm
• Deposit the required initial margin (good faith deposit) to be able to take out a sell or buy futures position
• Sell a futures contract to protect yourself against downside movement. Buy a futures contract to protect yourself against upside movement.
• You can close your position (trade an equal and opposite position to the original trade) or go into physical delivery