These derivatives contracts give local investors exposure to the international wheat market. as determined by the Kansas City Board of Trade (KCBT) now owned by CME Group. Locally, Hard Red Winter Wheat is traded alongside Soft Red Winter Wheat. Contracts are cash settled in Rands and easily accessed via JSE commodity derivatives members.
Who is this for?
Local market players seeking an alternative to our current physically settled wheat contracts could consider the Hard Red Winter Wheat as a alternative proxy to hedge their price risk. The contracts can also be used by speculators hoping to make a profit on short-term movements or benefit from the spread opportunities between the local and international market.
- Hard red winter wheat is similar in type and milling quality to South African produced wheat which means local market participants can consider this as an alternative for price risk management purposes specific to their wheat exposure
- Enables easy access to the international market with a contract traded in Rands
- Effective price risk management
- Hedge or gain exposure based on expectations of directional price, spread movement or volatility in hard red wheat
- Realise arbitrage and spread opportunities between foreign and local contracts
- The risk of loss given local and global environmental and socio-economic factors which can significantly impact the price of commodities
How to get Hard Red Winter Wheat
To access this product, register as a client with an authorised JSE member firm, deposit the required initial margin and sell or buy according to your needs.
- No limits apply to individuals, foreigners or corporate entities
- Pension funds and long term insurance companies subject to their 25% foreign allocation limits
- Asset managers and registered collective investment schemes subject to their 35% foreign allocation limits
- For the full details relating to qualifying factors, speak to your broker