AG Futures Buchels to Contracts

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Agricultural Futures Trading Unit
Goes to Contracts from Bushels
Starting - January 2, 1998

Chicago Board of Trade members June 17 voted to affirm the CBOT Board of Directors policy decision of one 18, 1996 to switch from bushels to contracts for soybeans, corn, wheat, and oats futures. The trading unit for agricultural futures goes to contracts from bushels beginning January 2, 1998.

The exchange already lists rice futures and all futures-options in contracts.

Use of the contracts trading unit for the agricultural futures will bring CBOT into accord with the industry norm, reducing significantly the likelihood of errors in the overall grain futures trading process.

In addition, trade involving grain futures and grain futures-options (already traded in contracts) will facilitate futures/options combined strategies, enhancing the potential or added volume in futures and options.

And because the international market segment is increasingly important and the contract designation is generally accepted in the global community, the contract designation for he CBOT instruments will tend to attract and sustain new volume from outside the United States.

In summary, the change to contracts from bushels will produce these benefits:

Accommodate New Business: Contracts will provide one easy, consistent way to place orders that will be less confusing to new traders and market participants doing business with the CBOT.

Greater Efficiency: One system will increase record-keeping efficiency.

Consistency: Because all other future exchanges worldwide trade in contracts, such designation for CBOT AG instruments will provide the consistency, which already exists everywhere else in today's global grain market.

Error Reduction: The new contract designation system will reduce the rate of errors.

Greater Ease in Spreading: The new system will eliminate problems and make simpler spreading between futures and options.

The change to contracts from bushels was one of the measures recommended by the CBOT Executive Committee last summer to increase the efficiency of AG trading operations as a way to heighten the level of confidence investors and hedgers already have in CBOT AG markets.

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