The Minneapolis Grain Exchange (MGEX) said Tuesday it would allow wheat from outside the United States to be delivered against its hard red spring wheat futures contract.
The change will be effective no later than the May 2013 contract month, the exchange said in a statement.
The majority of non-U.S. spring wheat deliveries will likely come from Canada, a practice that has already been going on as the domestic-origin requirement has not been enforced for years.
“I do not think its going to have a major influence,” said Shawn McCambridge, grains analyst at Jefferies Bache Commodities. “When a truckload of wheat comes through, it is kind of hard to say if it’s from five miles down the road or 500.”
The change does provide market participants with the certainty that using wheat from outside the U.S. is legal, MGEX said.
“MGEX is taking the first step envisioned for enhancing the appeal of the Hard Red Spring wheat futures contract to global market participants,” MGEX CEO Mark Bagan said in a statement.
“These decisions will open the door to new market participants.”
MGEX’s board of directors voted unanimously in favour of the change.