Rule Book Interpretation

MEMO
RE: Spring Wheat Delivery Rulebook Interpretation
 
TO: Clearing Members, Membership & Spring Wheat Regular Elevators  
DATE: October 11, 2001    
FROM: Mark G. Bagan, Vice President, Market Regulation

During the year, it came to the attention of the Minneapolis Grain Exchange (MGEX) there were concerns regarding the making and taking of physical rail delivery of Spring Wheat in satisfaction of warehouse receipts.  In particular, the MGEX learned there was confusion and disagreement between parties about the load-out obligations, grading and appeal process, and allocation of demurrage.  Consequently, the MGEX Contracts Committee took the matter under review.

After deliberate, extensive and thorough consideration of the known issues, the Contracts Committee recommended and the Board of Directors adopted the attached Interpretation.  The Interpretation does not alter the current Rules or Regulations; rather, the Interpretation elaborates on their intent.  Generally, the Interpretation addresses certain obligations and responsibilities of the parties involved in the Spring Wheat delivery process.  Specifically, the Interpretation helps define default on delivery and allocates the cost for demurrage dependant upon grading results.  The Interpretation is effective immediately.

In order for the Spring Wheat futures contract to remain a widely accepted and used pricing mechanism, the delivery pro cess must work efficiently and without unnecessary conflict or confusion.  Therefore, all parties in the delivery process are encouraged to quickly become familiar with the Interpretation and cooperate in its implementation.

If you have further questions, I may be reached at (612) 321-7166.

Click here to read the interpretation.