Agricultural Index Futures and Options at the Minneapolis Grain Exchange INDEX Advantages of Agricultural Index Futures Advantages of Agricultural Index Futures (con t) Contracts traded Index Futures Contract Specifications Quote Vendor Retrieval Codes Agricultural Spot Indexes Data Transmission Network (DTN) Spot Index Reporting Spot Index Calculation Spot Bids, Underlying Commodities Spot Bid Maps, by State The information contained in this publication is not meant to be construed as trading recommendations or advice of the Minneapolis Grain Exchange. Please consult the Rules and Regulations of the Minneapolis Grain Exchange for complete contract information and specifications. The Minneapolis Grain Exchange is not responsible for any errors or omissions.
Advantages of Index Futures Financial/cash settlement, no deliveries. When index futures and options expire, they settle to a financial value, eliminating deliveries. As a result, there are no delivery specifications, storage costs, grade differentials or load-out costs. Index based, country-origin pricing. DTN collects elevator bids daily, and in turn, calculates the spot indexes upon which MGEX agricultural index futures are settled. DTN gathers bids from a majority of U.S. elevators, and the indexes are an average of the prices in the country. The result: More accurate hedges, the opportunity to hedge basis and a market that tracks country cash values for commodities, not just a particular location. All calendar months traded. All months are listed so traders can more accurately hedge their needs and pay option premiums for only the months needed.
Advantages of Index Futures (con t) Hedging. MGEX index futures and options more closely track country prices because local basis is, in part, included in the index futures contract settlement price. For hedgers, this means their futures position will better reflect their cash position and provide a more accurate hedge. When paired with the fact that all months are traded, MGEX index contracts make a lot of sense in any hedging program. Electronic trading. MGEX agricultural index futures trade on an electronic platform that offers market transparency, instant execution and extended trading hours. Interclass wheat spreads marked-to-market, on a single platform. MGEX lists cash-settled futures on 3 classes of wheat hard red spring, hard red winter and soft red winter all on the e-cbot powered by LIFFE CONNECT platform. This gives the trader execution speed and efficiency in addition to marked-to-market margining.
Agricultural Index Futures and Options Contracts Traded MGEX electronically trades five cash-settled, agricultural futures and options contracts. The contracts are: National Corn Index (NCI) National Soybean Index (NSI) Hard Red Spring Wheat Index (HRSI) Hard Red Winter Wheat Index (HRWI) Soft Red Winter Wheat Index (SRWI) The contracts trade on the e-cbot powered by LIFFE CONNECT platform. Additionally, MGEX s deliverable hard red spring wheat contracts are traded electronically overnight on the platform.
Index Futures Contract Specifications NCI NSI Trading Hours 7:30 pm-:45 pm Sun-Fri 7:3 pm-:45 pm Sun-Fri HRSI, HRWI and SRWI 7:32 pm-:45 pm Sun-Fri Contract Unit 5,000 bushels 5,000 bushels 5,000 bushels Contract Months All twelve All twelve All twelve Tick Size ¼ cent per bushel ($0.0025) or $2.50 per contract ¼ cent per bushel ($0.0025) or $2.50 per contract ¼ cent per bushel ($0.0025) or $2.50 per contract Daily Price Limit $0.25 cents per bushel $0.60 cents per bushel $0.30 cents per bushel Last Trading Day Last business day of settlement month Last business day of settlement month Last business day of settlement month Settlement Settlement Date Ticker Symbol In cash, to simple average of DTN spot NCI for last three trading days of settlement month Business day following Last Trading Day IC In cash, to simple average of DTN spot NSI for last three trading days of settlement month Business day following Last Trading Day IS In cash, to simple average of DTN spot HRSI, HRWI or SRWI for last three trading days of settlement month Business day following Last Trading Day HRSI=IP; HRWI=IH; SRWI=IW Consult the "Rules and Regulations of the Exchange for complete contract specifications or call MGEX at 800-827-4746 or visit www.mgex.com
Index Futures and Options Retrieval Codes VENDOR NCI NSI HRSI HRWI SRWI DTN and Prophet X Futures @IC @IS @IP @IH @IW Options @IC @IS @IP @IH @IW CQG Futures XMC XMS MWI MRI MSI Options XMC XMS MWI MRI MSI FutureSource Futures NCI NSI SWI HW SRI Options NCI NSI SWI HW SRI For assistance retrieving MGEX Index quotes, contact your quote vendor. You may also find quotes and charts for MGEX Agricultural Index Futures and Options at: http://www.mgex.com/quotes_charts.html
Spot Agricultural Indexes INDEX Data Transmission Network (DTN) Spot Index Reporting Spot Index Calculation Spot Bids, Underlying Commodities Spot Bid Maps, by State
Data Transmission Network MGEX has a licensing agreement with DTN, a leading business-tobusiness provider of business information services, which enables them to cash settle futures and options to cash commodity indexes calculated by DTN. After the market close each day, DTN polls approximately 2,000 elevators to arrive at spot indexes for a variety of commodities.
DTN Spot Index Reporting DTN has been collecting data that comprise the spot indexes for several years. Elevator bids are collected by DTN beginning at approximately 2:00 p.m. (central time) each day and the spot indexes are posted by approximately 5:00 p.m. each day. You can find the daily index, and the number of indexes included in that day s average, at www.mgex.com or on a DTN or ProphetX data terminal. You may download historical data for the DTN indexes by visiting: http://www.mgex.com/history/historical_new.cfm The DTN spot indexes are simple averages of the price data included, i.e., one elevator equal one vote.
Spot Index Calculations Simple average of country elevator bids for commodities. Index futures are settled to a three-day average of the spot DTN Index for the last three trading days of the month. Market participants may trade in and out of their futures and options positions at any time; however, open positions held through contract expiration will have a final settlement to the three-day average of the spot DTN Index. Positions are marked-to-market after the close on the last day of trade, and positions are settled in cash the following business day. Spot indexes and number of elevators included in the average are posted each day at: www.mgex.com.
Spot Bids, Underlying Commodity NCI NSI HRSI HRWI SRWI U.S. #2 yellow corn U.S. # yellow soybeans U.S. # hard red spring wheat U.S. # hard red winter wheat U.S. #2 soft red winter wheat
NCI Bid Map, By State, Typical Day
NSI Bid Map, By State, Typical Day 3 62 83 64 38 29 83 344 28 99 33 74 79 3 4 3 5 2 4 9 4 Total =,732 2
HRSI Bid Map, By State, Typical Day 6 3 9 74 52 77 Total = 233
HRWI Bid Map, By State, Typical Day 4 7 2 2 45 39 89 2 9 8 Total = 457
SRWI Bid Map, By State, Typical Day 3 26 2 32 80 0 48 7 33 4 2 4 2 6 Total = 382
More Information Teri Huffaker Minneapolis Grain Exchange 400 S. 4 th Street, Suite 30 Minneapolis, MN 5545 62-32-70 800-827-4746 mgex@mgex.com www.mgex.com The information contained in this publication is not meant to be construed as trading recommendations or advice of the Minneapolis Grain Exchange. Please consult the Rules and Regulations of the Minneapolis Grain Exchange for complete contract information and specifications. The Minneapolis Grain Exchange is not responsible for any errors or omissions.