CME Group announces changes to wheat futures contract

CME Group, the world's leading and most diverse derivatives marketplace, today announced modifications to its Wheat futures contract as part of its regular and ongoing contract review process. The modifications, which are the result of feedback from a broad cross section of wheat futures industry participants, will go into effect in two phases. These contracts are listed with, and subject to, the rules and regulations of the CBOT.

"As a part of our regular and ongoing contract review process, and working together with a broad cross section of industry participants, we have identified several wheat futures contract modifications to ensure the contract continues to meet customer trading and risk management needs," said Tim Andriesen, Managing Director, Agricultural Commodities and Alternative Investments, CME Group.

Since February 2011, CME Group has been discussing potential contract modifications with industry participants. As a result of industry feedback, the following modifications will be implemented with the September 2013 wheat futures contract:

  • Eliminate wheat containing four parts per million (ppm) vomitoxin from deliverable grades.
  • Increase the discount for wheat containing three ppm vomitoxin from 12 cents per bushel to 20 cents per bushel.
  • Reduce the discount for wheat delivered in the Northwest Ohio delivery territory from 20 cents per bushel to 10 cents per bushel.

Beginning December 1, 2011, the exchange will allow the Hard Red Winter, Dark Northern Spring and Northern Spring wheat grades to be deliverable in the St. Louis delivery territory. Currently these classes of wheat are deliverable at all other delivery locations.

"These changes are focused primarily on improving the quality and merchantability of the wheat in the delivery system," said Andriesen. "We believe these modifications will further enhance the strong convergence we have seen in recent contract delivery periods."

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