Contract based on Brazilian soy is available from today
As of today (29), the Soybean Future Brazil is available to Brazilian agribusiness, a contract that has as reference the export price at the Port of Santos and financial settlement calculated in dollars per ton by the S&P Global Platts index. The investor who operates the product will have more transparency in the negotiation and pricing process, in addition to a price that adheres to the Brazilian reality.
According to B3, the São Paulo stock exchange, Brazil Soy Future was developed in partnership with the Chicago exchange, CME Group, and focuses on a safer protection mechanism based on the price of Brazilian soybeans and traded on two world-leading exchanges. In addition to the futures contract, call and put options on Brazil soybean futures are also being listed.
“Until now, in order to hedge [investment strategy] the traded grains, it was necessary to resort to the Chicago Stock Exchange. The correction between the prices of Brazilian and American soybeans has always been large, but in recent years there has been a detachment, which has made life very difficult for agents in the Brazilian production chain”, said the Commodities Superintendent at B3, Louis Gourbin.
According to Gourbin, Brazilian agribusiness is a world reference, which creates the need for products to reflect this. “The new derivative arrives to meet this need and to be a price risk management tool in Brazil. In addition, it is easily accessible for national participants, you only need to have an account at a brokerage house to trade the new contract on B3”, he explained.
According to B3, the agreement to create the Future of Soybean Brazil was signed between the two exchanges in 2020. The launch by B3 took place after approval by Brazilian regulatory bodies, at the end of August, and is part of the technical cooperation maintained by the two groups since 2007. This technical cooperation provides for the development of technology services and soybean futures contracts traded on the two exchanges, connecting global participants in this market to the Brazilian agricultural sector.
“This connection is important because it brings the world to Brazil and Brazil to the world. The soy market is international, but its production and marketing dynamics are different by geography, which brings the need for new regional products. The partnership between B3 and CME demonstrates our ability to provide new products that are effective and tailored to the demands of our customers,” said Gourbin.
According to data from the Brazilian Institute of Geography and Statistics (IBGE), Brazil is the largest producer and exporter of soy in the world, with 134 million tons of grain harvested in 2021.
Text translated using artificial intelligence.
