CME plans to launch Australian-dollar denominated wheat swaps

CHICAGO, July 29 Mon Jul 29, 2013 12:38pm EDT

CHICAGO, July 29 (Reuters) - CME Group Inc said it plans to launch two centrally cleared over-the-counter wheat swaps tied to the Australian dollar next month.

CME, owner of the Chicago Board of Trade, already offers cleared over-the-counter U.S.-dollar denominated swaps for corn, wheat, soybeans and Malaysian crude palm oil.

The Australian dollar wheat swaps will be for hard red winter wheat and soft red winter wheat and debut Aug. 12, pending regulatory approval. They will be approximately one-fifth the contract size of existing wheat swaps at 27 metric tons, according to CME.

Over-the-counter agricultural markets allow traders to privately negotiate their own prices, trade off exchange and then clear the transactions through CME.

Australia, traditionally one of the world's top wheat exporters, has been a focus of the global grain industry recently. Agribusiness company Archer Daniels Midland Co earlier this year struck a deal to buy Australian grain handler GrainCorp Ltd for $2.8 billion.

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