After major revisions to the contract and rules, Dalian Commodity Exchange (DCE) new No. 2 Soybeans futures’ contract was officially listed on May 31. The first contract being launched was the 1805 contract. The listing price was RMB 3,230 / tonne on its first trading day, at a discount of RMB 644 / tonne from the domestic No. 1 Soybeans 1805 futures contract’s closing price on May 26, which was RMB 3,874 / tonne.
In recent years, significant changes have taken place in the sources for imported soybean, with Brazil surpassing the US to become the largest source of soybean imports. Therefore, DCE has included both Brazilian and US soybean in the standard delivery grade for the new No. 2 Soybeans contract.
In addition, DCE has set different standards for broken grains, general damage, thermal damage and other indicators for goods loading in and loading out, taken into consideration the quality impact of warehouse storage.
Factory warehouse delivery has been introduced for the new No. 2 Soybeans contract. Based on the spot market trade practice, storage period, and government requirements for inspection and quarantine, DCE has also made several adjustments to the rules related to standard warehouse receipts, delivery and settlement, in order to add convenience for physical delivery and enhance delivery risk prevention.
For the risk management rules related to the No. 2 Soybeans futures, DCE has made only one major change by adjusting the position limit rules. First, to impose the same position limit levels on non-brokerage members and clients. Second, based on port inventory level, monthly average inbound shipments, and assessments of warehouse and factory warehouse receipts quantity, stipulate spot month position limits, and extrapolate position limit levels for the penultimate contract month and other non-spot contract months.
Moreover, DCE has added more contract months to the No. 2 Soybeans futures contracts, so that there is a contract for each calendar month of the year. Meanwhile, the trading fee is adjusted from RMB 2 / contract to RMB 1 / contract, with the delivery fee down from RMB 4 / tonne to RMB 1 / tonne.
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