Financially settled wheat futures and options contracts trade electronically

by Emily Buckley
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MINNEAPOLIS, MINNESOTA, U.S. — Raymond Lottie, chairman of the board of the Minneapolis Grain Exchange, rang the opening bell May 9 on the MGEX trading floor to commemorate the launch of the first financially settled wheat futures and options contracts to be traded in the United States.

The contracts, Hard Winter Wheat Index (HWI) futures and options, will trade exclusively on MGEXpress, the exchange’s electronic trading platform. The MGEX board of directors and ownership approved the rules and regulations of the contracts in April.

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, an Omaha-based electronic commerce and information services company.

HWI futures and options contracts will settle financially each calendar month to a three-day average of the spot 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.

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.