Market Matters Blog

CME Completes KCBT Acquisition

CME Group completed its acquisition of the Kansas City Board of Trade on Monday, bringing two of the world's benchmark wheat futures contracts under one roof. CME executives have said the move provides clearing efficiencies, new trading opportunities and the potential for new hard red winter wheat options productions.

"We're pleased to complete this transaction, combining KCBT Hard Red Winter Wheat products with our deep and liquid CBOT Soft Red Winter Wheat futures and options markets," said CME Group Executive Chairman and President Terry Duffy in a press release. "The integration of these two global wheat benchmarks will provide new trading opportunities to commercial grain market participants, wheat traders and customers who continue to rely on these tools to manage their price risk."

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"The addition of KCBT to CME Group will provide significant value to the customers, shareholders and members, beginning on day one," said CME Group CEO Phupinder Gill. "Starting today, we're integrating hard red winter wheat futures and options into our suite of already deep and liquid grain and oilseed products. Moving forward, we'll work with customers to grow existing KCBT and CBOT Wheat futures and options, while developing new and innovative products that will benefit customers of both varieties of wheat."

Starting today, CME and KCBT members and permit holders will be able to trade more cost effectively on the CME Globex platform and once clearing services are integrated, the cross-margining benefits and other capital efficiencies will kick in, CME said in its release.

But traders won't be able to start trading the spread opportunities until Monday, December 10. The implied inter-exchange KCBT-CBOT Wheat futures spread will be available for trading on CME Globex.

CME has promised to keep the Kansas City trading floor open for at least six months.

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