GRAIN EXCHANGE DELAYS RE-VOTE ON NEW WHEAT INDEX FUTURES AND OPTIONS
CONTRACTS - February 3, 2004
MINNEAPOLIS – The Minneapolis Grain Exchange (MGEX) announced
today that it is further delaying the ownership re-vote of contract
rules for Soft Red Winter Wheat Index (SRI) and Spring Wheat Index
(SWI) futures and options contracts.
The contracts were originally scheduled for launch December
19, 2003, after MGEX ownership voted to approve rules for the
two new financially settled wheat contracts on December 2. However,
the launch was delayed following a complaint filed by
twenty-seven MGEX members asking for an injunction to postpone the
launch of the new contracts.
In a hearing held December 17, 2003, MGEX and the plaintiffs agreed
to settle the complaint with no further legal action. At
that time, SRI and SWI futures and options were projected to begin
trading February 13, pending results of an ownership re-vote.
MGEX announced today that ballots for a re-vote on contract rules
wouldn’t be issued until after the March meeting of the MGEX
board of directors.
"We will use this slight delay to bring forward the best
possible risk-management products," said MGEX President Kent
Horsager. "Given the initial concerns surrounding the
launch of the contracts, we believe this to be the most prudent
SRI and SWI futures and options contracts will settle financially
each calendar month to a three-day average of the spot Soft Red
Wheat Index and the Spring Wheat Index, calculated daily by Data
Transmission Network (DTN). DTN collects elevator bids daily
for soft red winter wheat and hard red 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.
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