CME Group Agrees to Buy Kansas City Board of Trade for $126 Million

Oct 17, 2012

CME Group Inc. (CME) announced Wednesday, that an agreement has been reached to buy the Kansas City Board of Trade for $126 million and seeks to expand its agriculture product offerings. CME will now be able to add hard-red winter wheat into the mix, which is a good move for CME since it’s a dominant variety of wheat that’s grown in the U.S. CME is the world’s largest futures exchange and this new move signals that they want to continue to assert their dominance in the world grains futures market.

The strategic move comes as CME is presently the front runner on the world stage for futures-exchange operator by volume and competing with their rival IntercontinentalExchange Inc. Prior to the acquisition, CME offered futures trading for soft-red winter wheat but will now be able to offer contracts for both hard and soft wheat products. This will give CME a competitive edge, allowing them to develop new products in both futures and in options.

"Building on two rich legacies, the combination of KCBT Hard Red Winter Wheat products with our deep and liquid CBOT Soft Red Winter Wheat futures and options markets will provide new trading opportunities for market participants around the world – both on the trading floor and on the screen,” said CME Group Executive Chairman and President Terry Duffy.

The deal has been approved by the board and it’s expected to close later this year. CME reported in July that its second-quarter profit slipped 17% - largely attributed to slower trade on its futures. Company shares closed at $57.49 on Tuesday, with stock up at 18%.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.