K.C.B.T. to make HRW wheat contract revisions
August 14, 2007
by FoodBusinessNews.net Staff
KANSAS CITY — The Kansas City Board of Trade (K.C.B.T.) said it has received approval from the Commodity Futures Trading Commission (C.F.T.C.) for revisions to its hard red winter wheat contract. K.C.B.T. members voted to approve the changes, which were first proposed by the Wheat Contract Committee, on June 20.
"The exchange Wheat Contract Committee spent a great deal of time and effort over the last two years analyzing and discussing the subject of wheat contract rule enhancements," said Greg Edelblute, chairman of the Wheat Contract Committee. "Over the course of our extensive discussions, the committee recognized that certain modifications could further enhance the wheat futures contract. The changes proposed were considered necessary given the industry’s continued consolidation, the continuing trend of railroads toward larger units, and the desire of commercial market participants to have deliverable grades on the contract that better reflect the quality of wheat handled in both domestic and international trade.
"In connection with these changes, the committee was careful to construct a ‘package’ of revisions that resulted in the requisite ‘balance’ considered by the committee to be the most critical aspect in the consideration of any amendments to the contract. This balanced package of changes provides takers of delivery with higher quality assurances (elimination of No. 3 hard red winter and 10 insect damaged kernels per 100 grams limitation) and the ability to load-out the wheat at a faster rate (load-out rate or cadence), while providing makers of delivery with additional locations from which to deliver and increased storage and load-out fees."
The changes are effective with the July 2008 wheat futures contract month.
For more information, visit www.kcbt.com.