Minneapolis Grain Exchange Announces Addition Of Market Maker In National Corn Index Futures

The Minneapolis Grain Exchange (MGEX) announced today that beginning October 18, 2002, liquidity in National Corn Index (NCI) futures, traded at the Minneapolis Grain Exchange (MGEX), will be enhanced by the addition of a Market Maker. Market Maker programs are commonly used by futures exchanges to provide a baseline of liquidity in newly listed products, thus offering interested commercial and speculative audiences the assurance of market entry and exit at a reasonable bid/ask spread. Logistics of trading NCI futures are not altered because of the existence of a Market Maker. MGEX backs the financial integrity of the market through the margining process, as is always the case.

MGEX President and CEO Kent Horsager said, "MGEX believes strongly in the applicability of NCI futures and options as effective hedging instruments and it is our responsibility to enhance market liquidity. Commercial interest in the contract has been very high, but lacking a certain liquidity level, firms are reluctant to trade the product. The addition of a market maker should raise confidence in their ability to smoothly enter and exit NCI futures."

Minimum commitments to be honored by the designated Market Maker (MM) are listed in the following paragraphs.

In two NCI futures contracts for which the Chicago Board of Trade (CBOT) has listed corn futures trading months, the MM will provide market depth of 20 contracts bid and 20 contracts offered at a spread of no more than one-cent per bushel during CBOT corn futures trading hours. When CBOT markets are closed, the NCI MM will provide market depth of 20 contracts bid and 20 contracts offered for two trading months, at a spread of no more than two-cents per bushel. These conditions will be met for the majority of NCI trading hours.
· Additionally, the MM will respond promptly to quote requests for additional NCI futures contract months with two-sided, two-cents wide markets.

NCI futures are cash settled, meaning the ultimate offset of outstanding positions is through financial settlement as opposed to physical delivery. Open positions held at the end of each trading month are offset against the three-day average of the National Corn Index, calculated daily by Data Transmission Network, which is an average of approximately 1,700 elevator bids. Prices traded are reflective of country-origin corn, thereby offering a high correlation to cash corn prices.

MGEXpress Trading Hours for NCI and NSI Futures and Options:

Morning session: 8:30 a.m. until 1:30 p.m. (Central Time)
Afternoon session: 2:00 p.m. until 4:00 p.m. (Central Time)

MGEX, established in 1881, is the only market for hard red spring wheat, white wheat, durum wheat, and NSI and NCI futures and options. For more information about MGEX, visit www.mgex.com.