The contract encourages a forward price curve similar to those in the CBOT Soft Red Winter and KC Hard Red Winter Wheat futures markets, by allowing wheat to be held on a warehouse certificate. This enables EU Wheat futures to provide effective tracking of the underlying cash market through time, solid convergence, and subsequently, valuable price risk management capabilities.
The contract launched with 16 warehouses approved for the delivery of physical EU wheat, taking current committed storage capacity to around 400,000 metric tons.
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SOURCE CME Group