The Minneapolis Grain Exchange (MGEX) is a commodities and futures exchange of grain products. It was formed in 1881 in Minneapolis, Minnesota, United States as a regional cash marketplace to promote fair trade and to prevent trade abuses in wheat, oats and corn. MGEX became a subsidiary of Miami International Holdings after the two companies merged in 2020.[2]
MGEX offers five financially settled agricultural index products: Hard Red Spring Wheat Index (HRSI), Hard Red Winter Wheat Index (HRWI), Soft Red Winter Wheat Index (SRWI), National Corn Index (NCI) and National Soybean Index (NSI).
Futures are traded exclusively electronically on the CME Globex platform. Options are traded side-by-side.
History
Interior c. 1939
Founded as the Minneapolis Chamber of Commerce in 1881, the MGEX has been a marketplace for producers, processors and millers for more than 125 years. The three Grain Exchange buildings in downtown Minneapolis are now listed on the National Register of Historic Places.
In 1883, the Chamber of Commerce introduced its first futures contract: hard red spring wheat. By 1946 "Chamber of Commerce" had become synonymous with organizations devoted mainly to civic and social issues. In 1947, the exchange was renamed the Minneapolis Grain Exchange. Today the exchange is most recognized by its logo and uses MGEX as first reference.
On December 19, 2008, the Minneapolis Grain Exchange ceased operations of the open outcry trading floor, but continues daily operations for the electronic trading platform. Today, HRSW futures trade exclusively electronically and options trade side-by-side.
Kenney, Dave (2006). The Grain Merchants: An Illustrated History of the Minneapolis Grain Exchange. Afton Historical Society Press in collaboration with the Minneapolis Grain Exchange. ISBN1-890434-74-4.
Minter, Adam (August 2006). "Gimme Grain!". The Rake. Archived from the original on 2007-09-28. Retrieved 2007-03-28.
A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.
In finance, a futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset transacted is usually a commodity or financial instrument. The predetermined price of the contract is known as the forward price. The specified time in the future when delivery and payment occur is known as the delivery date. Because it derives its value from the value of the underlying asset, a futures contract is a derivative.
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. Futures exchanges provide physical or electronic trading venues, details of standardized contracts, market and price data, clearing houses, exchange self-regulations, margin mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts. Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Futures exchanges can be integrated under the same brand name or organization with other types of exchanges, such as stock markets, options markets, and bond markets. Non-profit member-owned futures exchanges benefit their members, who earn commissions and revenue acting as brokers or market makers. For-profit futures exchanges earn most of their revenue from trading and clearing fees.
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