New cattle forward contract hedging tool hits the market

Financial product development company Riemann Agriculture has this week launched a forward contract hedging mechanism for cattle, based on the Eastern Young Cattle Indicator. The new Riemann Ag product is not a futures product, but an over-the-counter forward contract, operating via the Mercari licenced swap execution facility. The contract is cash-settled against the EYCI index (meaning there no physical delivery), as a bi-lateral contract directly between two counter-parties, with no exchange involved. When the deal settles at the end, one has to pay the other – effectively taking the counter-party risk of dealing with the other side, but also providing…

Source: Beef Central
New cattle forward contract hedging tool hits the market