.jpg)
In order to promote the effective functioning of the oils and soybean meal futures market and provide the clients with more convenient delivery services, on September 16, Dalian Commodity Exchange (DCE) issued a notice to launch the new round of pilot for “warehouse receipts switch” on soybean meal, soybean oil and palm olein. The new pilot will further reduce the costs for the switch, add more opportunities in switch application in delivery months, and improve the quotation system of the oils and soybean meal futures.
According to the notice, the pilot of warehouse receipts switch is valid from the date of the issuance of the notice to July 31, 2016. In comparison with the previous pilots, improvement has been made in four aspects this time: first, the number of the pilot groups has been increased and the pilot range has been further expanded, with Louis Dreyfus (China) Trade Co., Ltd. added to push the number of the pilot groups for soybean meal futures to 10; China Agri-Industries Holdings Limited, Cargill Investment (China) Ltd. and Chinatex Grains and Oils Imp. & Exp. Co., Ltd. are added to increase the numbers of the pilot groups for soybean oil and palm olein futures to 5 and 4 respectively. Second, the switch costs will be further reduced. During the pilot period the ceiling fees for the production plan adjustment to be paid by the buying clients to the factory warehouses have been cut by RMB 10 / ton, as those for the two modes of warehouse receipts for spot goods and warehouse receipts for warehouse receipts have been adjusted down from RMB 30 / ton and RMB 80 / ton to RMB 20 / ton and RMB 70 / ton respectively. Third, more opportunity has been added in the application for switch for soybean meal and soybean oil futures. On the basis of the original one opportunity in the switch application on the first trading day after the last delivery day, another opportunity has been newly added with the application time on the seventh trading day in the delivery month. Fourth, the continuous announcement of the regional price differentials for the spot goods has been achieved throughout the year.
The previous two rounds of pilots for the switch business initiated by DCE on July 30, 2014 and November 4, 2014 respectively have played a positive role in eliminating the worries of the feed enterprises and other medium, small and micro-sized buying clients about the uncertainty in delivery locations, and made the enterprises more active in participating in the hedging transaction and delivery of soybean meal, with satisfactory effects achieved for the pilots.
An official of a feed enterprise who participated in the switch said that the regional price differentials previously released by DCE provided not only the pricing basis for both sides in the “warehouse receipts switch”, but also important pricing references for the market, having effectively improved the efficiency of market negotiations.
