Moex launches physically delivered Russian wheat futures contract

Russian bourse Moscow Exchange (Moex) and state-owned bank VTB have launched a physically delivered wheat futures contract on Monday, according to an official note.

The contract volume will be 25 mt for fourth-class wheat (min 12.5% protein, 13% moisture) and quoted in rubles per metric tonne.

Contracts months are March, September, and December with delivery to silos in Voronezh, a region approximately halfway between Rostov on the Azov Sea and Moscow.

VTB will be the market maker for the contract.

“We hope that the new futures contract will become a benchmark and will provide grain market participants with a convenient and reliable mechanism for hedging price risks,” Igor Marich, Member of the Executive Board and Managing Director for Sales and Business Development of the Moscow Exchange said.

The Moscow Exchange and VTB announced they were developing the current contract back in early December 2019 to replace a swap contract that was closed in 2019 after a series of thefts undermined confidence in the delivery mechanism.

VTB has grown its presence in the country’s grains industry over the past two years and now owns stakes in trade houses, elevators, ports, and logistics companies.