GRAIN EXCHANGE ESTABLISHES LAUNCH DATE FOR NEW CONTRACTS MINNEAPOLIS—
April 9, 2003
The Minneapolis Grain Exchange (MGEX) ownership has approved rules
and regulations for Hard Winter Wheat Index (HWI) futures and options.
Ballots were counted on April 8, 2003 and the contracts are scheduled
to launch May 9, 2003 on the exchange’s electronic trading
The new contracts will be the first financially settled wheat futures
and options traded in the U.S. The settlement index, the Hard
Winter Wheat Index (HWI), is a simple average of approximately 400
country elevator bids collected daily by Data Transmission Network
(DTN), an Omaha-based electronic commerce and information services
In February 2001, MGEX and DTN entered into a licensing agreement
whereby MGEX would develop financially settled futures contracts
using DTN data. HWI futures and options will be the third
products launched under this arrangement and will be traded exclusively
on MGEXpress® alongside National Corn Index (NCI) and National
Soybean Index (NSI) futures and options, launched on February 15,
2002. HWI futures and options will be submitted to the Commodity
Futures Trading Commission (CFTC) under the certification process,
which does not require approval prior to contract launch.
“Preliminary analysis indicates that HWI futures and options
will be very highly correlated to wheat prices originated in the
country, offering buyers and sellers a very effective hedge and
the opportunity to manage basis risk,” said Kent Horsager,
MGEX president and chief executive officer. “Our exchange
has worked hard over the past year to improve and enhance accessibility
to our electronic market, MGEXpress®, and participants in the
hard winter wheat market will be beneficiaries of those efforts.”
HWI futures and options contracts will settle financially each calendar
month to a three-day average of the Hard Winter Wheat Index.
DTN collects elevator bids daily for hard red winter wheat and averages
them to arrive at the HWI. The contracts will reflect country-origin
pricing for hard red winter wheat. Because there is no delivery
alternative, futures and options contracts will expire simultaneously.
Trading hours for HWI futures and options are as follows:
Morning session: 8:30 a.m. until 1:30 p.m. (Central Time)
Afternoon session: 2:00 p.m. until 4:00 p.m. (Central Time)
Complete contract specifications for HWI futures and options, as
well as a pre-trade analysis of the potential for the contracts,
can be found at www.mgex.com.
MGEX, established in 1881, is the only market for hard red spring
wheat, NSI and NCI futures and options. For more information
about MGEX, visit www.mgex.com.