StoneX announces successful execution of first Australian Feeder Cattle Swap
StoneX Group Inc. (NASDAQ:SNEX) announces that it successfully executed the first cattle swap via the StoneX Australian Feeder Cattle Swap offering. The counterparties to the trade were longstanding StoneX client Mort & Co, a Queensland-based lot feeder, and an East Coast-based cattle trader in Australia.
Since the launch of the Australian Feeder Cattle Swap in February 2022, StoneX has onboarded twelve existing accounts with over fifty new clients to be onboarded over the course of the year. The influx of new clients speaks to the overwhelming demand for additional risk hedging vehicles to address market volatility in the world’s third-largest beef market.
Tim Jude, StoneX’s Sydney-based Livestock and Commodities Broker commented,
“StoneX is proud to meet the demand of the Australian cattle market for an instrument to hedge their risks and manage their margins. This swap is a significant milestone in bringing increased transparency and more efficient pricing to the cattle market. We’ve seen a significant decrease in the spread between the highest and lowest price paid in the market each week as a result of this swap and anticipate even greater efficiencies going forward.”
The StoneX swap settles against a monthly average of the weekly Argus Australia northern feeder cattle index, launched last year. The index is based on transactions between farmers and feedlots within a 300km radius of Dalby in the heart of Australia’s major cattle region, the Darling Downs. Contributions from a deep pool of sources across the supply chain ensure that the index reflects fair market value. The specificity of the Argus price methodology was directly developed with risk management tools in mind.
“I am delighted to see the first StoneX Australian northern feeder cattle (Argus settled) swaps trading, enabling market participants to hedge risk and manage margins in these increasingly turbulent times,” said Argus Media chairman and chief executive, Adrian Binks. “We are pleased to provide the settlement mechanism for this financial instrument, as we seek to bring greater price transparency to the Australian cattle markets.”