Euronext to ‘make MATIF great again’: Paris Grains

Europe’s commodities exchange, Euronext, has signalled its intent to revamp its offerings as competition in the exchange space heats up and amid disappointing volumes and questions over its corn contract.

Under the banner ‘Make MATIF Great Again’, Euronext’s head of commodities, Nicholas Kennedy, said the company was looking to focus on the agriculture space.

“We are looking at getting back to basics, back to core values and core contracts,” Kennedy told delegates at Agritel’s Paris Grain Day, Friday, acknowledging that the potential for MATIF had not been reached.

MATIF is a legacy acronym stemming from the Marche a Terme International de France, which was absorbed into Euronext when the Paris Bourse and Euronext NV merged in 2000.

The name is often used colloquially within the industry to refer to Euronext’s corn and wheat contracts.

“We are looking at our core contracts, reinforcing the delivery mechanism to restore trust and attract international investors,” Kennedy told the gathering, as well as looking at embracing digital technology around certificates and introducing warrants.

He also acknowledged that the existing corn futures contract needed maintenance.

“We know it needs to change and this year we’ll announce the extension of delivery points to key parts of Europe,” Kennedy said, although he declined to develop further.

Alongside, the core contracts, Kennedy acknowledged that the exchange needs to boost its option markets, with volume falling 40% in 2017, and also signalled a review of some of its launches of the last few years.

“We may have overextended our wings,” Kennedy said, although the revamp does not rule out looking at new contracts that may use financial settlement instead of physical delivery.

“There are other forms of price discovery and we might be looking at the over-the-counter markets. I’m making no announcements today, but we’re thinking about it,” Kennedy said.

In mid-December, the Chicago Mercantile Exchange launched a Black Sea corn and wheat contract that uses a financial reference as a settlement point, rather than physical delivery and many in the industry had expected Euronext to follow suit.

Kennedy also expected Euronext to start publishing a Commitment of Traders report by the end of January.