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Fri June 28, 2013
RIP Kansas City Board Of Trade
The open pit trading of winter wheat at the Kansas City Board of Trade has quieted down during its 157 year history, not quite silenced from its loud, rowdy past, when one journalist wrote that traders were “yelling as if a panther were at them.”
But on Friday (June 28) it will go silent, with the final ring of the trading day at 1:15 p.m. Central time, ending an era when this city put its name on a crop that became the crucial piece of our daily bread.
Last year, the board was bought for $126 million by Chicago’s CME Group, which owns the Chicago and New York Mercantile Exchanges and the Chicago Board of Trade.
As Laura Spencer reported this week, many people in Kansas City are sad to see the end of a local agricultural institution.
"I think Kansas City is very sorry to see it go, and I know I am," historian Heather Paxton said. "Not just because of the tradition of it, but because of all the people who worked there, and how much they loved it and how many people stayed for decades."
But the Board of Trade also had an enormous national and international reach, its start in the 1850s thanks to Kansas’ new export, winter wheat, brought here by German-Russian Mennonites in the 19thcentury. Kansas remains the largest producer of wheat in the U.S.
The Kansas City Star recently noted the passing of the board, so tied to hard red winter wheat, which is “the world’s bread-making wheat.”
“It’s a hardy crop, resistant to drought, heat, freezes and frosts. Kansas has plenty of all those, and the hard red’s tenacity has made it one of the few cash crops that can flourish in the state.”
I wish I could have seen the days of what’s called “open outcry,” the shouting and pushing and sometimes fisticuffs of open pit trading.
"Open outcry is, to me, a rather odd and wonderful thing," Paxton told Laura. "There was a description from 1945 from a journalist who came to the Board of Trade and he talked about seeing grain samples lying around and the fact that the traders were in the pit and he said, 'yelling as if a panther were at them.'"
The advent of technology has nearly silenced the open outcry, and Laura reported that nearly 90 percent of Kansas City’s contracts are processed by computers.
The Board of Trade was also a large part of glasnost, that era of Russian openness introduced by Mikhail Gorbachev in the 1980s. When the U.S.S.R. began buying grain from the U.S., the news broke from sources at the Board of Trade, Harold Bradley, a former trader, told Laura.
That openness extended to a Soviet TV crew, who were granted access to the exchange to do a documentary on U.S. grain hedging, Bradley said.
“It was presumed this would be an analytical and favorable story. When it was produced, I believe the narrator called us ‘petty profiteering little beetles,’” he said. “Alliteration like that tends to stick with you.”
The one thing from the Kansas City Board of Trade that will stick, at least for now, is a little piece of the name. Laura reports that although they will be traded in Chicago, contracts will still be called “Kansas City hard red winter wheat.”