MGEX Announces Changes to Hard Red Spring Wheat Contract

January 20th, 2012

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Category: Grains

(MINNEAPOLIS – MGEX) – , a Designated Contract Market (DCM) and Derivatives Clearing Organization

(DCO), today announced it received regulatory approval from the Commodity Futures Trading

Commission (CFTC) for changes to its flagship Hard Red Spring Wheat (HRSW) contract. Approval

means the U.S. origin condition will be removed from the HRSW contract, ensuring spring wheat market

participants from around the world can choose to deliver spring wheat in satisfaction of open MGEX

HRSW futures positions. The removal of the U.S. condition is effective with the September 2012 contract

month. Deliveries must meet all HRSW contract specifications and grades. The CFTC approval came

after an in-depth regulatory review.

A multi-phase approach to ensure the HRSW contract meets the needs of the global marketplace was

announced by the Exchange in August 2011. In addition to the removal of the U.S. origin condition,

MGEX also announced it has added a deoxynivalenol (vomitoxin) specification to the HRSW contract

effective with the May 2013 contract month. The new specification is a 2.0 parts per million (ppm)

maximum for spring wheat delivery. Vomitoxin levels above 2.0 ppm will be delivered with a twenty cents

($0.20) per bushel discount. Levels exceeding 3.0 ppm vomitoxin will not be deliverable on the HRSW

contract. The change will continue to showcase the HRSW futures contract as the foremost quality wheat

contract available to global market participants.

Further, the Exchange announced a change in storage rates for spring wheat delivery on the HRSW

futures contract. Rates will increase from the current five cents ($0.05) per bushel per month to seven

cents ($0.07) per bushel per month effective with the May 2013 contract month.

“Given the changes, worldwide wheat market participants can be certain the MGEX spring wheat contract

will continue to represent their market interests and fulfill their risk management needs,” Mark G. Bagan,

CEO & President, MGEX said. “On behalf of the MGEX management team, I would like to publicly thank

our Contracts Committee and Board of Directors for their dedication to our flagship contract and ensuring

it meets global risk management needs. This is a significant step in cementing the MGEX Hard Red

Spring Wheat contract as the world’s premium quality wheat contract,” Bagan said.

The MGEX Rulebook provides additional details on the three HRSW contract improvements mentioned

above.

Information on Exchange volume and open interest is available at www.mgex.com.

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