By Alexander Osipovich

The biggest U.S. futures exchange is making a play for one of the last slices of the grain markets that it doesn't already control.

Chicago-based CME Group said Wednesday that it planned to launch futures and options on hard red spring wheat, subject to regulatory approval. The move is a bid to grab market share from its much smaller rival, MIAX Futures, formerly called the Minneapolis Grain Exchange, which offers similar contracts.

Hard red spring wheat is a high-protein type of wheat used in artisanal breads, bagels and pizza dough. For decades, futures contracts on hard red spring wheat were the flagship product of the Minneapolis Grain Exchange, a tiny commodity exchange that was founded in 1881 and remained independent even after CME acquired several other big U.S. market operators.

In 2020, the Minneapolis Grain Exchange announced it would merge with Miami International Holdings, an exchange group best known for running the MIAX family of options markets.

The two biggest U.S. benchmark wheat varieties are soft red winter wheat, or Chicago wheat, and hard red winter wheat, known as Kansas City wheat. During the past two decades, CME took over the futures markets for those two wheat varieties by acquiring its rivals, the Chicago Board of Trade and Kansas City Board of Trade.

Futures contracts are used by farmers, commodity traders and food producers to hedge against volatility in grain prices or bet on market moves.

The Minneapolis wheat contract is thinly traded, and traders could potentially find better liquidity if they migrate to a similar contract at CME. Commodity markets have a long history of exchanges attempting to grab market share by launching copycat versions of their competitors' futures contracts.

Still, CME's success is not assured: the Chicago exchange giant has a weak track record in launching new agricultural futures contracts. In 2017, it announced the launch of Black Sea wheat and corn contracts, but suspended them in 2023. CME has also struggled to draw interest in Brazilian soybean futures.

MIAX Futures "has had strong collaborative relationships with key Hard Red Spring Wheat market participants dating back over a century," a Miami International spokesman said.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

January 08, 2025 14:00 ET (19:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.