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Swaption

CBH offers a wholesale Swaption product as a financial hedging tool, which gives participating growers the ability to hedge price risk.
A close up shot of green heads of barley with a grower in the background inspecting the crop

About CBH Grain Commodity Swaption

Growers participating in the CBH Grain Commodity Swaption product will receive daily Reference Swap price indications and monthly position statements. Reference Swaps exercised under the CBH Grain Commodity Swaption are non-deliverable. Seasonal sub-limits apply under each Swaption.

CBH will assess all grower applications on a wholesale basis to consider eligibility for the product. The Grower Service Centre has a dedicated Swaption line for all queries on the product, contact us at 1800 199 083 or contact your local Business Relationship Manager for more information.

Key features
  • Offered all year round
  • Available for wheat and canola
  • Multiple contract months available
  • 50 tonnes minimum contract size
Key risks
  • The Swaption product does not protect against basis risk when pricing grain.
  • Growers need to consider the impact of production risk on the effectiveness of their swaption hedges.
  • The Swaption product could result in significant cash losses incurred by the grower (this would normally be offset by higher prices for physical grain).
  • Growers have credit risk against CBH to meet its obligations under the product.
  • Portfolio credit limits for each grower mean reference swap positions could be closed out if limits are breached.

To participate in the CBH Grain Commodity Swaption product, growers must contact their local Business Relationship Manager or the Grower Service Centre to confirm eligibility.