World Grain - June 2015 - 112

FEATURE: TRADERS UTILIZING EXCHANGES MORE THAN EVER

The leading agricultural contract is
white maize, the country's number one
food staple. There are also wheat contracts, but according to Sielaff, "companies can't hedge big volumes of imported wheat on SAFEX. They come
to Chicago."
In 2001, Johannesburg Stock
Exchange acquired SAFEX.
Elsewhere in Africa, there are few
functioning futures exchanges. The
Ethiopian Commodity Exchange has
gotten a lot of publicity but does mainly
cash contracts for coffee, legumes and
oilseeds bound for export, though the
exchange was intended for maize and
other cereals.

ing country. The global agribusiness
giants who dominate the sector prefer
Chicago for hedging.
The Buenos Aires Exchange occupies
a landmark building dating from the
early 20th century when Argentina was
D JUDLQ VXSHUSRZHU $V RI $SULO
total open interest for soybeans, maize
and wheat amounted to almost 2 million
WRQQHVYDOXHGDWPLOOLRQZLWKVR\beans delivered to Rosario making up
about two-thirds.

AUSTRALIA
The Australian Securities Exchange
(ASX) has offered grain futures contracts since its 2003 acquisition of
the Sydney Futures Exchange (SFE),
SOUTH AMERICA
which dated back to 1960. Two con$V EH¿WV WKH ZRUOG¶V ODUJHVW H[SRUWHU tracts for wheat - Western Australia
of agricultural commodities, Brazil has a and New South Wales - as well as feed
futures exchange handling commodities. barley and sorghum are currently listed
In 2008, the Brazilian Mercantile and on the exchange.
Futures Exchange merged with the Sao
Kristen Hopkins, ASX commodities
Paulo stock exchange to form the BM&F sales manager, reports that NSW wheat
Bovespa. However, contract volumes are for delivery to the two export ports in
small in relation to farm production.
the state accounts for over half of vol,QWKH¿UVWWKUHHPRQWKVRIWKHUH umes. Domestic millers and feedlots
ZHUH RQO\ FRQWUDFWV QHDUO\ as well as global trading houses and
half of them for maize. The number country merchants are major customers
of soy futures was negligible despite of the exchange, says Hopkins, but he
Brazil's status as the top soy export- VXJJHVWV ³$VLDQ ÀRXU DQG IHHG PLOO-

ers are prospective customers because
Australian grain is what they buy."
INDIA
Since 2003, tech-savvy Indian traders have relied on the wholly online
platform of the National Commodity &
Derivatives Exchange (NCDEX) for futures hedging of wheat, feed maize, barley, soybeans, a number of spices and a
dozen or so other agricultural commodities. According to its website, NCDEX's
PHPEHUVPDLQO\EURNHUFDVKGHOLYeries for over 2 million customers using
600 accredited warehouses.
CONCLUSION
Outsiders often equate futures exchanges with casinos. But many do not understand that the investors who speculate in
these markets provide the liquidity for leJLWLPDWHDJULEXVLQHVV¿UPVWRPLWLJDWHWKH
price risk they face in increasingly volatile
agricultural commodity markets.
David McKee's grain industry consultancy, Key
International LLC, provides market research,
feasibility analysis, technical studies and project
guidance to companies and organizations. He
can be reached at davidmckee59@msn.com.
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inquiries to worldgrain@sosland.com. For reprints of
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