German bourse to trade in wheat

quot;We are working together with interested parties in order to offer a wheat contract aimed at the European milling industry,quot; WTB president Friedrich Rode said.

quot;The halving of the European land set-aside rate will help rid the market of oversupply and I expect markets might begin to tighten up in November/December,quot; he added.

The 50-tonne milling wheat contract, based on 11.5 per cent minimum protein and 220 hagberg, would be in mark per tonne, although WTB had plans to speedily embrace the euro, the new EU common currency.

The product would compete with an existing wheat contract on theFrench Matif exchange, although that one was geared to third country exporters.Delivery points would be Rostock on the Baltic Sea, a range of inland ports and Metz/Frouard on the Moselle.

WTB did not give an exact start date.

Juergen Jung, chairman of the WTB board, said new contracts needed to be developed and introduced quickly to create larger trade volumes on the exchange.Pigs and potatoes trades, which started on April 17, were still lagging behind initial expectations because of operational delays and lack of commitment from potential user groups.

quot;We weren8217;t to know that pig prices would reach historic lows soon after we started,quot; Jung said. quot;This is discouraging for producers while at the same time processors have not yet realised this is their opportunity.quot;Potato prices are relatively high, but growers are not yet convinced they should lock them in.

quot;Of course we are exploring new potential customer groups and we have to do a lot of information and educational work.quot; But WTB priceswere beginning to be recognised as a reliable forecaster of cash market developments, which was positive and encouraging, while open interest was also growing. Daily trade in the first year was originally pegged at an average 200-300 contracts, but in the last few days were around only 70-80 contracts.

However on June 23, the exchange traded more than 100. Jung said WTB was maintaining its medium to long-term targets, which implied the exchange had to reach 300,000 contracts of annual trade by the third year in order to break even, which would include all contracts introduced by that date.Eckhard Lohre, a member of the Clearing Bank Hannover AG board, which is made up of three banks, said the recent installation of the first foreign General Clearer, Nederlandse Liquidatiekas NLKKAS, was paving the way for attracting more Dutch customers.

Talks were being held with other interested institutions at home and abroad about the possible transfer of clearing functions. Seven companies were currentlyauthorised for trading on the WTB while another eight applications were being handled.