Grainnet

North American Millers' Association Supports Changes to Chicago Board of Trade Wheat Contracts

Washington, DC--Over the years, the North American Millers' Association (NAMA) has repeatedly told the Chicago Board of Trade (CBOT) that the exchange's wheat contract was gradually losing its viability as a hedging mechanism.

According to the latest issue of NAMA News, NAMA submitted comments to the Commodity Futures Trading Commission that support the changes proposed by the CBOT to delivery point specifications in wheat contracts.

The CBOT's wheat futures contract provides for the delivery of various grades and classes of wheat, but traditionally the futures contract has priced No. 2 soft red winter wheat.

Delivery is made by the transfer of warehouse receipts representing wheat in store at regular warehouses.

Delivery may be made in Chicago, IL at par, in Toledo, OH at a discount of 2 cents per bushel, and in St. Louis at a premium of 8 cents per bushel.

CBOT's proposed changes will modify the locational price differentials for delivery at Toledo and St. Louis, change the quality price differentials for U.S. No. 1 and U.S. No. 2 grade northern spring wheat, and reduce the speculative position limits for the March and May contract months during the last five trading days.

Additional proposed changes include modifying the load-out provisions for the wheat, corn, oats, and soybean futures contracts and changing the last trading day and the last delivery day for all contract months for the wheat and oats futures contracts.

This information was first reported in the Federal Register.