South Africa to start soy derivative contracts

South African stock exchange operator JSE Ltd said on Thursday it will introduce cash-settled soy contracts to allow local traders to hedge their risk against international benchmarks.

The JSE said the contracts will be based on the CBOT global benchmark prices, licensed from the Chicago-based CME Group.

The contracts, representing 100 tonnes for soy and soymeal and 25 tonnes for soyoil, will be listed, traded and settled by the JSE starting on May 17, the bourse said in a statement.

The JSE's commodity derivatives market was initiated in 2009 with the launch of corn futures, followed by gold, platinum and crude oil contracts.

Meanwhile, it is expected that the area to be planted with soy in South Africa will stay about the same as in the 2010-marketing year, which, on average yield, will produce 527,000 tonnes of soy, 10% less than in the 2010-marketing year.

The country exported about 161,620 tonnes of soy in the 2009-marketing year and expectation are that it will increase to 180,000 tonnes in the 2010-marketing year.