One portion of the change mandates that No. 3 hard red winter wheat warehouse receipts delivered in satisfaction of futures contracts to the Clearing Corporation and registered with the Board of Trade must contain no more than 5 percent wheat of other classes.
The amendments to the rules will become effective with the July 2003 wheat futures contract month. Any person establishing a position in the July 2003 wheat futures contract month or beyond does so according to the amended rules and any economic decision made in establishing such a position should be done with that understanding.
The amendment also allows for replacement receipts (during the time period of one business day prior to the first intention day of the July 2003 wheat futures contract month to three business days following the first intention day) reflecting the maximum 5 percent wheat of other classes. The issuing warehouse must comply with the request and may charge the receipt holder a maximum of 5 cents per bushel to issue replacement receipts.
According to the vote, discounts for No. 3 hard red winter wheat will be changed from 3 cents per bushel under contract price to 5 cents under contract price. Also, deliveries made in Hutchinson, Kansas have been changed to a discount of 9 cents per bushel under the contract price as opposed to the previous discount of 12 cents.
Additionally, the Board has authorized the listing of March, May and July 2003 wheat futures contract months for trading effective Thursday, Jan. 10, 2002. Trading in the March and May 2003 wheat futures contract months should be done with an understanding of the aforementioned rule changes and the relationship between those contract months and the July 2003 contract month.
KCBT members ratified the wheat contract rule amendments by a vote of 101-14. These rule amendments are being submitted to the Commission for final approval.
The Kansas City Board of Trade, chartered in 1876, is the world's largest futures market for hard red winter wheat.
