WooCommerce create new product and add to cart on form submit

I’m not sure exactly what you are doing, but the following code did work for me in that it created a new product and added it to the cart. Note, I had to use $_GET to test on my setup since I don’t have the rest of your code and didn’t feel like creating a form.

EDIT: I’ve added a simple <form> element and switched to $_POST.
EDIT 2: I’ve removed the form. Apparently the OP has the form on the front page.

add_action('init', 'customcart');

function customcart() {

  if (isset($_POST["addcustomcarts"])) {

    global $woocommerce;

    $my_post = array(
      'post_title'    => 'My post',
      'post_content'  => 'This is my post.',
      'post_status'   => 'publish',
      'post_author'   => 1,
      'post_type'     =>'product'
    );

    // Insert the post into the database
    $product_ID = wp_insert_post( $my_post );

    if ( $product_ID ){
      add_post_meta($product_ID, '_regular_price', 100 );
      add_post_meta($product_ID, '_price', 100 );
      add_post_meta($product_ID, '_stock_status', 'instock' );

      //Getting error on this line.
      $woocommerce->cart->add_to_cart( $product_ID, $quantity=1 );

      exit( wp_redirect( get_permalink( woocommerce_get_page_id( 'cart' ) ) ) );

    }

  }

}