Discussion in 'Commodity Futures' started by TraDaToR, Jan 16, 2013.
Very important News.
Durum Wheat is a special Wheat, too.
But here in these News,
dislike me that want to trade it in Italy.
That does not mean,
that i have any problem with the Italian People!
That kind of Issues can handle it better i believe,
the Americans ( U.S.A ).
That is a Futures Contract that must create it for trading in the Minneapolis Grain Exchange ( MGEX ),
Here is some background info on the U.S. durum wheat market.
I'm pretty sure the MGEX tried a durum wheat futures contract along with a white wheat contract a long time ago, but both died out due to a lack of trading interest.
These exchanges are always trying new contracts and most of them fail. The MGEX used to have Black Tiger Shrimp (we're far from an ocean) and now they're trying Apple Juice concentrate (much of which is produced in China). The CME launched softs to compete with the long-established ICE products and to retaliate, the ICE launched grain contracts that mirror those of the CME (CBOT) AND extended trading hours so the people in Chicago have a longer day.
It will be interesting to see if ICE can grow the grain trading business in Canada now that they own the Winnipeg exchange and the Canadian Wheat Board (marketing monopoly) has been dismantled.
Thank you very much for your Comments.
i have to say that i send that Topic to Austin Damiani of Frontier Futures, too.
I receive the following Answer from him:
MGEX had a durum contract in the past. It was not successful, and was discontinued. The durum market is too consolidated in the US. There is not the same need for price discovery as you have in other wheats.
Austin J Damiani
MGEX Branch Office
Indeed, durum is a special wheat! this is even not wheat, this is durum.
Here in Europe, understanding the durum market is straightforward:
- 100% cash market so far.
- 2 two main producing countries: France and Italy
- 1 main consumer: Italy
- this is a very price-sensitive market: as soon as a premium develop, almost immediately buyers switch to other origins (this is much pregnant than in any other market IMO) - if the buyer considered is Italy: source is France or North Africa.
- the number of producers is quite small so is the number of buyers (mostly pasta companies)
- durum prices are ofted (say) 'dis'-correlated from wheat prices (it has a 50-150 euro/t price premium over wheat)
As regards this new future market in Italy. Well .... Some new future contracts have been launched recently in the old continent markets by the CME (black sea wheat), Liffe Euronext (skimmed milk powder, malted barley) and Eurex (skimmed milk powder) with no great success because the market is not mature, because liquidity is insufficient and/or because of local specificities of the abgribusiness. I cast much doubt this national initiative by Italy to launch a future contract on durum can be successfull.
Feel free to PM me if you need details on the durum market in Europe
Borsa Italiana just launched future contracts on durum (once again this is NOT hard wheat, this is durum wheat).
Already (!), 15 contracts have been traded.
There is a single delivery location: Foggia ... Sicily ....
I respect their try,
but 15 Futures Contracts Volume,
is less than little.
Remember right now,
the Spot Indices of the Minneapolis Grain Exchange ( MGEX ),
that almost have no Volume.
If someone does not see a significant Volume,
it is above than difficult to participate to any Market.
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