Minneapolis Grain Exchange

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Minneapolis Grain Exchange
Founded	1881
Headquarters	Minneapolis, MN
Key People	Chairman,Scott A. Cordes; President/CEO Mark G. Bagan
Products	Cash, futures and options grains products
Web site	http://www.mgex.com/

Minneapolis Grain Exchange (MGEX)^[1] was founded in 1881, and has been the principal market for Hard Red Spring Wheat (HRSW) - first as a cash market and subsequently for futures and options.

Contents 1 Products 2 Open Outcry And Electronic Trading 3 History 4 Membership 5 Recent News 6 References

Products

In addition to offering trading in futures and options on Hard Red Spring Wheat, MGEX lists five agricultural indexes: the Hard Red Spring Wheat Index (HRSI), Hard Red Winter Wheat Index (HRWI), Soft Red Winter Wheat Index (SRWI), National Corn Index (NCI) and National Soybean Index (NSI). The indexes are calculated daily by DTN, an Omaha-based electronic commerce and information services company.

• MGEX Hard Red Spring Wheat Index Futures
• MGEX Hard Red Winter Wheat Index Futures
• MGEX Soft Red Winter Wheat Index Futures
• MGEX National Corn Index Futures
• MGEX National Soybean Index Futures

Open Outcry And Electronic Trading

On Jan. 13, 2008 (for trade date Jan. 14, 2008), Minneapolis Grain Exchange moved electronic trading for its futures and options products from the e-CBOT platform to the CME Globex electronic trading platform.^[2]

On Apr. 14, 2008, HRSW Options began trading side-by-side (open outcry and electronic) during the trading day. New hours (CT) are:

• 6 p.m. - HRSW Futures and Options and Agricultural Index trading opens electronically
• 6 a.m. - HRSW Futures and Options halt and enter pre-open
• 9:20 a.m. - NCI Futures and Options Open
• 9:30 a.m. - HRSW Futures and Options side-by-side open
• 1:15 p.m. - HRSW Futures close
• 1:30 p.m. - HRSW Options and NCI close
• 1:45 p.m. - Wheat Index Products, NCI, and NSI electronic trading close
• 2:30 p.m. - 4:30 p.m. - Monday - Friday afternoon pre-open session for futures only

History

Founded as the Minneapolis Chamber of Commerce in 1881, the Minneapolis Grain Exchange has been a marketplace for producers, processors and millers for more than 125 years.

The Minneapolis Chamber of Commerce opened as a regional cash marketplace to promote fair trade and to prevent trade abuses in wheat, oats and corn. Before the development of this centralized marketplace, farmers in the region had no way of knowing if they were receiving the best price for their grain. Most farmers harvested and sold their crops at the same time, and the subsequent overabundance of grain reaching the market set the supply-and-demand curve askew. Although the Chicago Board of Trade existed in Chicago, grain was a local issue in the 1900s; thus, a local Minneapolis market reflected unique local grain producer/user supply/demand and quality issues.

In 1883, the Chamber of Commerce introduced its first futures contract: hard red spring wheat. This contract was launched to address price risk management needs of buyers and sellers of spring wheat and still trades today.

By 1946, “Chamber of Commerce” had become synonymous with organizations devoted mainly to civic and social issues. In 1947, the exchange was renamed the Minneapolis Grain Exchange.

Membership

The MGEX clearing members include:

• ADM Investor Services, Inc.
• AGP Grain
• Alaron Trading Co.
• Bay State Milling
• The Cliff Larson Company
• Country Hedging, Inc.
• FC Stone, LLC
• Frontier Futures, Inc.
• General Mills Operations
• Infinium Capital Management
• J.P. Morgan Futures, Inc.
• MF Global Inc.
• Newedge USA, LLC
• Penson GHCO
• Prudential Bache Commodities, LLC
• TENCO, INC
• UBS Securities, LLC

Membership Resources

• Membership Transfers^[3]
• Membership Prices^[4]
• Historical Membership Prices^[5]
• Trading & Clearing Fees^[6]

Recent News

• Oct. 20, 2008, MGEX Promoted Georgette McDonald to Director, Business Services and Product Development.^[7]

• Oct. 14, 2008, MGEX appointed new public directors for 2008-2009. Four public directors were appointed by the Board to serve one-year terms. Curt Denisuik, Director of Commodity Risk Management, Canadian Wheat Board; James S. Ginsburg, Managing Partner at Vernon & Park Capital, L.P.; and William R. Power, long-time equities and futures investor, return to the Board. New to the Board of Directors this year is Steve Fanady who brings a wealth of experience from work as a member and independent trader in Chicago.

• Oct. 3, 2008, new members of the MGEX Board of Directors elected. The elected candidates included Scott A. Cordes, Country Hedging, Inc.; Scott O. Hedin, St. Croix Commodities, Inc.; Christopher T. Matzdorf, UBS Securities, LLC; and Scott D. Nagel, ADM-Benson Quinn, a division of Archer Daniels Midland. The newly elected board members will serve two year terms, effective immediately.

• Sept. 12, 2008, New enhancements will be made to the MGEX (Minneapolis Grain Exchange or Exchange) Hard Red Spring Wheat (HRSW) futures contract settlement process. Beginning Sep. 15, the HRSW futures contract will settle to a volume-weighted average settlement price for each individual HRSW futures contract month.

• Sept. 4, 2008, MGEX breaks calendar-year electronic volume record with 460,146 contracts traded since Jan. 2, 2008.

• Sept. 3, 2008, MGEX announces all-time volume record for fiscal year 2007-2008 with 1,684,439 contracts traded.

• July 11, 2008, MGEX announced it planned to change the official closing period for the MGEX Hard Red Spring Wheat futures contract to match the options contracts from the last 30 seconds of trading to the last 60 seconds of trading. The change to the settlement price process would become more inclusive by taking into consideration bids, offers and trades from the final trading minute from both platforms. The changes would be made as of July 14, 2008.^[8]

• May 23, 2008, MGEX promotes Todd Posthuma to associate director, Market Operations and Information Technology.

• Apr. 14, 2008, MGEX begins side-by-side trading in options.

• Apr. 9, 2008, MGEX names Rita Maloney manager marketing, communications, media relations. Rita has over 20 years experience in

the media industry. Most recently, Rita worked at WCCO radio where she served as a business editor and anchor and was instrumental in the development and coordination of the all-business talk radio format on KCCO. She was also a reporter and host of KCCO Business Today.

• Feb. 26, 2008, MGEX reports remote clearing enhancements.

• Feb. 25, 2008, MGEX HRSW futures contract trades at $24 per bushel, the highest price ever for a wheat futures contract.

• Feb. 8, 2008, MGEX expands price limits to $.60 per bushel above or below the previous day's settlement price.

• Jan. 13, 2008, MGEX migrated to the CME Globex electronic trading platform.

• Jan. 1, 2008, MGEX reports record calendar-year volume, monthly volume and membership values. The exchange broke its all-time calendar-year trading volume with 1,826,807 contracts traded, which is 10 percent higher than the record set in 2006 (1,655,034 contracts traded). December trading volume also set a new record with a 46 percent increase in trading over the previous December record set last year (130,797) contracts traded versus 89,817 contracts traded). In 2007, seven of the 12 months set new monthly volume records. A membership traded at an all-time high of $285,000 Dec. 28, 2007.

• Dec. 14, 2007, MGEX welcomed Vice President, Business Development Roger Hipwell. Hipwell, who brings deep sales and marketing background in the flour milling and bakery mix sectors, will focus on building business for MGEX's spring wheat futures and options contracts and agricultural index products.

• Oct. 15, 2007, the MGEX named its 2007-2008 public directors, officers and committees. Four public directors were appointed to the board to serve one-year terms. Curt Denisuik, director of commodity risk management, Canadian Wheat Board returned to the board. New to the board of directors were Robert D. Gordon, CEO of DTN, James S. Ginsburg, managing partner at Vernon & Park Capital, L.P., and William R. Power.

References

1. ↑ Home Page. Minneapolis Grain Exchange. Retrieved on October 25, 2007.
2. ↑ Press Release. Minneapolis Grain Exchange. Retrieved on January 13, 2008.
3. ↑ Membership Transfers. Minneapolis Grain Exchange. Retrieved on January 25, 2008.
4. ↑ Membership Prices. Minneapolis Grain Exchange. Retrieved on January 25, 2008.
5. ↑ Historical Membership Prices. Minneapolis Grain Exchange. Retrieved on January 25, 2008.
6. ↑ Trading & Clearing Fees. Minneapolis Grain Exchange. Retrieved on January 25, 2008.
7. ↑ Press Release. Grain Net. Retrieved on October 22, 2008.
8. ↑ Press Release. Minneapolis Grain Exchange. Retrieved on July 17, 2008.