New BM&FBOVESPA Corn Contracts Will Be Launched On September 19th - In Addition To The New Futures And Options Contracts, The Regional Price Basis Futures Contract Will Also Be Launched

On September 19, 2008 BM&FBOVESPA will launch the new corn contracts which will include four types of products. In addition to the futures contract – with price formation in Campinas (SP) – and the call and put options on corn futures contracts, all of which will have the possibility of cash settlement, the new Regional Price Basis Futures Contract will also be launched.

The objective of this new basis futures contract is not only to increase liquidity and attract new participants, but also to reduce regional price fluctuations related to the transactions of market agents, thereby increasing the efficiency of hedging (price protection) mechanisms and expanding the visibility of physical delivery. The base regions authorized for trading include the following cities: Triângulo Mineiro (MG), Rio Verde (GO), Cascavel (PR) and Paranaguá (PR). The base contracts will allow for the hedging of the difference between the price in one of these regions and the price in the futures contract with settlement in Campinas. Regarding the Paranaguá-based contract, the product is geared to the foreign market since the licensed warehouses are located in the port’s exportation corridors. Since the base region is a port location, some contract specifications have been altered, such as those related to the underlying asset – particularly in regard to the product quality required in the international market – and to tax-related issues, since the price quotations in external markets are exempt from all tax-related and non-tax related charges.

The contract size for each futures, options and basis futures contract is equal to 450 bags of 60-net kilograms, corresponding to 27 metric tons of corn in bulk. All of these contracts will be traded exclusively on the GTS Electronic Trading System. The trading hours for the future and basis futures contracts will run from 9:00 a.m. to 12:00 noon, and, in the after-hours (GTS) market, from 1:00 p.m. to 6:00 p.m. The trading hours for the options contracts will run from 9:00 a.m. to 4:00 p.m. The delivery months authorized to be traded will be January, March, May, July, August, September and November, and the last trading day will be on the fifteenth day of the delivery month.

The current BM&FBOVESPA corn futures contract will remain valid since it still shows open positions. The participants choosing to settle their positions in the current contract by migrating them to the new contract will be exempt from the Exchange fees and the other fees related to the migration transaction.