Cash-Settled Corn and Soybean Futures
In February, MGEX announced the signing of a licensing agreement with Data Transmission Network (DTN) allowing MGEX to use DTN data to develop cash-settled futures contracts. Corn and soybean futures and options will be the first contracts launched by MGEX using settlement prices calculated from DTN data.
Cash-settled futures contracts differ from traditional futures contracts in that delivery is not an alternative; therefore, market participants can hold their outstanding futures positions until contract expiration without the possibility of delivery. This also allows for simultaneous expiration of futures and options.
Following the last trading day, outstanding MGEX corn and soybean futures will be offset against the average National Corn Index (NCI) and National Soybean Index (NSI) from the last three business days of the settlement month. DTN collects, audits and reports corn and soybean bids from elevators across the country, which comprise the NCI and NSI, respectively.
