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Euronext sees H2 2021 launch for durum, barley cash-settled futures

PARIS, Nov 19 (Reuters) - Euronext expects to launch in the second half of next year its planned durum wheat and animal-feed barley contracts, marking the exchange’s move into cash-settled futures for grains, its head of commodities said on Thursday.

Euronext announced a year ago it would develop cash-settled contracts, starting with durum and feed barley, as a way to expand its commodity business currently focused on futures offering physical delivery.

It initially targetted a launch this year for the durum and feed barley contracts, depending on the development of a related trading platform.

“The cash-settled platform will be available H2 next year,” Nicholas Kennedy told the Global Grain conference.

“We confirm durum wheat and barley, those are the only ones we confirm for the moment, but we are in talks for other products.”

Euronext’s commodity business is dominated by its French-based milling wheat futures, a widely used reference for the European grain market.

Instead of using delivery at the expiry of futures to connect them with physical markets, cash settlement uses a physical price benchmark.

As well as developing new futures contracts, Euronext might also develop spread products, for example to trade price differences between its milling wheat futures and physical origins like German or Black Sea wheat, Kennedy said.

Euronext will work with multiple price reporting agencies to obtain physical benchmarks, Kennedy added. (Reporting by Gus Trompiz and Sybille de La Hamaide; Editing by Mark Potter)

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