Wheat Commodity Futures Option Trading CBOT

 Free Wheat Futures Trading Guide

 

Wheat Futures and Options

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Wheat Market Commentary

Managing Price Risk with Grain and Oilseed Futures & Options (PDF)
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Wheat Commodity Futures

The primary uses for wheat are flour, brewing, gluten and livestock feed.

Kansas is the largest wheat-producing state, followed by North Dakota and Oklahoma.

There are different varieties of wheat grown in the U.S.

  • Soft Red Winter Wheat - It is grown from the Southern Midwest down to Texas. These wheat futures trade at the CBOT.
  • Hard Red Winter Wheat - This is the largest of the US wheat crops. This wheat is planted in the winter and harvested in May.
  • Spring Wheat - is planted in the spring and harvested in the fall. These wheat futures trade at the MGE.

WHAT IS HARD RED WINTER WHEAT?

Hard red winter wheat, grown primarily in the Great Plains, is one of five classes of wheat produced in the U.S. and is used to make bread.

Hard red winter wheat accounts for around 45 percent of total U.S. wheat production and total U.S. wheat exports. Buyers of U.S. hard red winter wheat in recent years have included Egypt, China, Russia and Japan as well as other countries.

Other types of wheat and their uses:

  • Soft red winter, around 20 percent of U.S. production, used for cookies crackers and pastries;
  • Hard red spring, around 20 percent of production, a higher-protein bread wheat;
  • White wheat, around 10 percent of production, used for noodles and bakery products including flat breads;
  • Durum, around 5 percent of production, used for pasta.

Chicago Board of Trade

Wheat Futures CBOT

 Contract Size 5,000 bushels (~ 136 Metric Tons)

Deliverable Grade #2 Soft Red Winter at contract price, #1 Soft Red Winter at a 3 cent premium, other deliverable grades listed in Rule 14104.

Pricing Unit Cents per bushel

Tick Size (minimum fluctuation) 1/4 of one cent per bushel ($12.50 per contract)

Contract Months/Symbols March (H), May (K), July (N), September (U) & December (Z)

Trading Hours CME Globex (Electronic Platform) Sunday – Friday, 7:00 p.m. – 7:45 a.m. CT and
Monday – Friday, 8:30 a.m. – 1:15 p.m. CT

Open Outcry (Trading Floor) Monday – Friday, 8:30 a.m. – 1:15 p.m. CT

Daily Price Limit: $0.60 per bushel expandable to $0.90 and then to $1.35 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day proceeding the first day of the delivery month.

Settlement Procedure Daily Grains Settlement Procedure (PDF)

Final Wheat Settlement Procedure (PDF)

Last Trade Date The business day prior to the 15th calendar day of the contract month.

Last Delivery Date: Second business day following the last trading day of the delivery month.

Product Ticker Symbols CME Globex (Electronic Platform) ZW
W=Clearing

Open Outcry (Trading Floor) W

Wheat Futures Options CBOT

Contract Size One Wheat futures contract (of a specified month) of 5,000 bushels

Tick Size (minimum fluctuation) 1/8 of one cent per bushel ($6.25 per contract)

Strike Price Intervals: Trading shall be conducted for put and call options with striking prices in integral multiples of five (5) cents and ten (10) cents per bushel. More details on strike price intervals are outlined in Rule 14A01.E.

Contract Months/Symbols March (H), May (K), July (N), September (U) & December (Z); a monthly (serial) option contract is listed when the front month is not a standard option contract. The monthly option contract exercises into the nearby futures contact. For example, an August option exercises into a September futures position.

Daily Price Limit: $0.60 per bushel expandable to $0.90 and then to $1.35 when the market closes at limit bid or limit offer. There shall be no price limits on the last trading day.

Last Trade Date: The last day of trading in any standard or serial option for expiry in a given month shall be the last Friday which proceeds by at least two business days the last business day of the calendar month proceeding such option’s named expiry month. If such Friday is not a business day, then the last day of trading in such option shall be the business day prior to such Friday.

Exercise The buyer of a futures option may exercise the option on any business day prior to expiration by giving notice to the Clearing House by 6:00 p.m. Chicago
time. Option exercise results in an underlying futures market position. Options in-the-money on the last day of trading is automatically exercised.

Expiration Unexercised Wheat futures options shall expire at 7:00 p.m. on the last day of trading.

Trading Hours CME Globex (Electronic Platform)
Sunday – Friday, 7:00 p.m. – 7:45 a.m. CT and
Monday – Friday, 8:30 a.m. – 1:15 p.m. CT
Open Outcry (Trading Floor) Monday – Friday, 8:30 a.m. – 1:15 p.m. CT

Product Ticker Symbols CME Globex (Electronic Platform) OZW
W=Clearing

Open Outcry (Trading Floor) WY for calls/WZ for puts

Exchange Rule These contracts are listed with, and subject to, the rules and regulations of CBOT.

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