Minneapolis Grain Exchange Set To
Launch New Wheat Index Contracts - November 19, 2003
MINNEAPOLIS– The Minneapolis Grain Exchange (MGEX) announced
today that the MGEX board of directors has approved rules and regulations
for Soft Red Wheat Index (SRI) and Hard Spring Wheat Index (SWI)
futures and options. Pending ownership approval, the contracts
are scheduled to launch December 19, 2003 on the exchange’s
electronic trading platform, MGEXpress®.
The new contracts will join the Hard Winter Wheat Index (HWI) in
the exchange’s suite of financially settled wheat futures
and options and its pit-traded hard red spring wheat futures and
options contracts. The Soft Red Wheat Index (SRI) is a simple
average of approximately 360 country elevator bids for U.S. No.
2 soft red winter wheat collected daily by Data Transmission Network
(DTN), an Omaha-based electronic commerce and information services
company. The Hard Spring Wheat Index (SWI) is an average of
approximately 210 country elevator bids for U.S. No. 1 hard red
spring and dark northern spring wheat.
“The launch of these two new contracts will complement our
existing product base and offer unique spread trading and basis
hedging opportunities for hedgers and speculators,” said Kent
Horsager, MGEX president and chief executive officer. Ray
Lottie, chairman of the MGEX board of directors and manager of cereal
and eastern grain operations for General Mills added, “The
ability to execute intercommodity spreads between the three major
wheat classes via one electronic trading platform is an exciting
and unique trading prospect.”
SRI and SWI futures and options contracts will settle financially
each calendar month to a three-day average of the Soft Red Wheat
Index and the Hard Spring Wheat Index, respectively. DTN collects
elevator bids daily for soft red wheat and hard spring wheat and
averages them to arrive at the SRI and the SWI. The contracts
will reflect country-origin pricing for soft red wheat and hard
spring wheat. Because there is no delivery alternative, futures
and options contracts will expire simultaneously.
SRI and SWI 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.
Trading hours for SRI and SWI futures and options are as
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).
MGEX, established in 1881, is the only market for hard red spring
wheat, Hard Winter Wheat Index (HWI), National Corn Index (NCI)
and National Soybean Index (NSI) futures and options. www.mgex.com