FAQ Thailand White Rice 5% Broken (Platts) futures

The Chicago Board of Trade (CBOT) Exchange of CME Group is launching a Thailand Long Grain White Rice 5% Broken FOB Financially Settled (Platts) Futures contract (pending CFTC review). The contract size is 25 tonnes and quoted in US$ and cents per tonne. The first trade date is 23 November 2021 and January 2021 will be the first contract month available for trading and clearing.

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The Thailand White Rice Financially Settled (Platts) Futures is listed in the U.S. by CBOT and cleared in the US by CME Clearing. The regulator is the CFTC.

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The Thailand White Rice Financially Settled (Platts) Futures is based on the “Thailand Long Grain White Rice 5% broken FOB” price assessment published by Platts LRI.

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The price assessment reflects the export price for Thai origin Long Grain White Rice classified as 5% broken. This refers to the maximum content of broken rice in the cargo.  Platts LRI will normalise to the 5% broken standard for contracts, bids or offers that vary from the stated quality.

The price assessment reflects the following characteristics:

• Origin and Quality: Thailand Long Grain White Rice, 5% broken
• Cargo size: 1,000-5000 metric tonnes +/- sellers’ option. Delivery Location: FOB Bangkok
• Loading period: 15-45 days ahead of the assessment day.

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The final settlement price for each contract month is equal to the arithmetic average of the “Thailand Long Grain White Rice 5% broken FOB” price assessment published by Platts for each day that it is determined during the contract month, rounded to the nearest $0.01.

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CME Group will collate prices from the brokers and provide daily settlement prices for the listed Thailand White Rice Financially Settled (Platts) Futures contract months.

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Yes, there are price limits on CME Globex and CME ClearPort. These are set at US$40 on the first trading day.

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The futures contract is available for trading on the CME Globex electronic trading platform and for submission as a block trade for clearing via CME ClearPort.

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Subject to certain requirements being met, such as minimum trade size, the futures contract can be privately negotiated via the brokers as a block trade and submitted into CME ClearPort for clearing.

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There are minimum quantity and reporting time requirements. The minimum block trade size is 5 contracts (125 metric tonnes), and trades need to be reported by the broker onto ClearPort within 15 minutes of execution. Firms need to be classified as an Eligible Contract Participant (ECP) in order to be able to engage in block trades. The definition of "Eligible Contract Participant" (ECP) can be found in Section 1a(18) of the Commodity Exchange Act.

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Trades may be entered into CME ClearPort from 6:00 PM ET Sunday to 5:45 PM Friday CT, with a 60-minute pause each day from 4:00 PM to 5:00 PM CT.

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All transactions on CME Globex and CME ClearPort through 4:00 p.m. CT will be considered as cleared for that trade date.

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The Thailand White Rice Financially Settled (Platts) Futures will have a Spot Month Limit of 2,500 contracts for all calendar months. Single Month Accountability Level and All Month Accountability Level are both set at 2,500 contracts.

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Monthly contacts will be listed for 12 consecutive months of the Thailand White Rice Financially Settled (Platts) Futures contract. A new monthly contract will be added following the termination of trading in the front month contract.

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Yes, you can apply for a hedge exemption. Market participants may be eligible to receive an exemption from Position Limits in accordance with Rule 559 based on having bona fide hedging positions (as defined by CFTC Regulation §1.3(z)(1)), risk management positions and/or arbitrage and spread positions. To obtain an exemption application or for further information on the exemption application process, please contact us at Hedgeprogram@cmegroup.com.

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Margin levels will be made available a few days prior to the first trading day, November 23, 2020.

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• Step 1: Register on CME Clearport: https://www.cmegroup.com/clearport/registration.html#newFirmUserRegistration
• Step 2: Appoint an Inter-Dealer Broker (IDB) that services this market
• Step 3: Request your CME Group Clearing Firm to permission your chosen IDB for trade submission.

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This will be made available week commencing November 16 2020 ahead of the launch on November 23 2020.

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Contact thairice@cmegroup.com or any of the Inter Dealer Brokers (IDBs) that service this market for guidance on getting set-up to trade and clear the contract.