* U.S. hard red winter wheat pits move to Chicago on Monday
* Contracts to be traded at Chicago Board of Trade
* Few Kansas City traders to make 500-mile journey
By Tom Polansek
CHICAGO, June 28 (Reuters) - Forget the culture clash, the
Chiefs versus Bears football debates and fierce arguments over
who has the better beef.
When the U.S. hard red winter wheat futures and options
contracts begin trading in Chicago on Monday after a
century-and-a-half legacy in Kansas City, the change may pass
all but unnoticed save for tweaks on wall boards displaying
prices and a stray "take it!" shouted by one of a handful of
At the Chicago Board of Trade, you see, the correct term to
buy contracts is "sold."
Only a handful of the roughly three-dozen remaining Kansas
City Board of Trade open-outcry traders will be moving 500 miles
northeast to trade the contract in person, too few to cause a
stir in the cavernous Chicago Board of Trade floor.
In a stark illustration of the overwhelming dominance of
electronic markets, the legacy of wheat trading that started on
the banks of the Missouri River in 1856 will end with a whimper
on Friday when the KCBT turns the lights out after the last
shouts die down.
The contracts will re-emerge on Monday to trade in the same
pits that have long housed Chicago's benchmark brand of the
grain: soft red winter wheat, used to make pastries. The Kansas
City variety, used to make bread, is grown on twice as much U.S.
farmland as Chicago's brand, but volume for hard red winter
wheat has long lagged behind its more liquid rival.
The only physical changes at the Chicago trading floor will
be on electronic wall boards that list prices for contracts,
said Tim Andriesen, managing director of agricultural
commodities for CME Group Inc, which owns the CBOT.
"I suspect on July 1 you'll walk in and, with the exception
of some different locations on the wall board, it will all be
pretty similar," he said.
For a few, CME's $126 million takeover of the KCBT last year
is opening new doors, offering the chance to join a more vibrant
trading environment and to delve more deeply into options.
CME on Monday will launch options contracts on KCBT wheat
futures that offer market participants new ways to trade the
price difference between the three U.S. wheat markets, analysts
Options trader Dan Roemer, who will have the rare
distinction of trading wheat in three different cities after
starting his career at the Minneapolis Grain Exchange, says
moving to Chicago from Kansas City is just the cost of staying
"Every industry evolves over time," he said. "This industry
has now evolved as well. You change with it or you die."
He plans to live in Chicago during the week and return on
some weekends to Kansas City, his home for the past 15 years. He
leased a condo in downtown Chicago near Millennium Park, a
popular tourist attraction.
Another KCBT trader, who didn't want to be named, moved to
Chicago this spring, bunking in a friend's spare bedroom.
The CBOT offers an array of different products for traders,
such as corn and soybeans, and different kinds of options, while
the KCBT trades only hard red winter wheat futures and options.
"I'm basically becoming more diversified," said the trader.
For most KCBT floor traders, there was little question of
moving. Not only do family ties run deep, but dwindling trade in
Chicago's own pits make for an uncertain future. Open-outcry
trading now represents only about 1 percent of total trading in
CBOT's benchmark wheat futures contract, down from 5 percent
four years ago.
More typical is open-outcry options trader Markus Groebner,
who will move into an office in Missouri to trade the wheat
contract electronically come Monday. The KCBT floor itself will
become an electronic trading center until the end of September,
from which Kansas City-based traders can execute trades.
Like so many other traders who have lived through the
closure of one trading pit after another, those in Kansas City
rued the likely loss of information that can be gleaned from
standing for hours in a shouting mass of people.
"It's not just a financial marketplace, but it's an
information marketplace where people can sort things out,"
Groebner said about the trading floor.
Groebner hopes to replicate the experience of the floor
somewhat by sharing his new office with a group of about 10
traders who deal in a variety of markets.
NEW LANGUAGE, FASTER PACE
The few KCBT traders who are uprooting their lives will need
to adopt new trading terms and keep up with a faster pace.
An average of roughly 85,000 wheat futures contracts trade
in Chicago each weekday; in Kansas City it's been closer to
32,000 contracts per day for futures and options combined,
according to CME data.
The change also has meant job losses for some back-office
and clearing staff of trading companies in Kansas City.
ADM Investor Services was among those that reduced their
headcount, said Scott Smith, a vice president for the company.
He was transferred to an ADM office in Overland Park, Kansas,
from the building near Kansas City's historic Country Club Plaza
shopping district that housed the KCBT trading floor.
"There's been a lot of personalities, a lot of stories, a
lot of history that are going to be missing - the personal side
of the business," he said. "Certainly it's an end of an era."