Jan 8 (Reuters) -

CME Group ( CME ) said on Wednesday it plans to launch

spring wheat futures and options in the coming months that will

compete directly with a historic Minneapolis market now owned by

Miami International Holdings.

Traders expect CME, which dominates agricultural futures

with benchmark grain and soy contracts, may steal trading volume

for hard red spring wheat after its launch slated for

early in the second quarter.

The owner of the Chicago Board of Trade already runs U.S.

markets for two other types of wheat, soft red winter wheat and

hard red winter wheat.

"Market participants will now be able to manage price risk

across every major type of wheat on one exchange and all cleared

in a single clearing house," said John Ricci, CME's global head

of agricultural products.

Hard red spring wheat was historically traded at the

Minneapolis Grain Exchange, or MGEX, which launched its

signature contract in 1883 to trade the high-quality crop used

to make bread and frozen dough products. It has the thinnest

trading volume of the three U.S. wheat contracts.

Miami International Holdings last year renamed the

Minneapolis market as MIAX Futures Exchange after buying MGEX in

2020.

MIAX plans to transition the trading and dissemination

of market data for MGEX products from CME's Globex platform to a

platform it is building on June 30, spokesman Andy Nybo said.

MIAX is developing its own platform so it can launch new

products without asking CME to add them to Globex, he added.

"We can control our own destiny," Nybo said. Asked about

CME's launch, he said competition is healthy in markets.

"We're in it to compete."

MIAX said in September it entered a licensing agreement

with Bloomberg Index Services and will list a number of equity

index products.

But exiting Globex will cost it some wheat business.

Brian Hoops, president of broker Midwest Market

Solutions, said he will shift to CME's product.

"Taking it off of Globex, I think, is going to eliminate

a lot of the volume from someone like me who's doing brokerage

work with clients that are growing spring wheat," Hoops said.

"It's kind of the end of the old Minneapolis Grain

Exchange product."

Commercial traders, such as flour mills and grain

elevators, initially might favor the Miami exchange as the

established marketplace, or use both trading platforms, said

Frayne Olson, an agricultural economist with North Dakota State

University. Ultimately, he said, speculative traders will

determine which platform dominates.

"If you don't have the trading volumes, the liquidity to

get into and out of positions, the contract is going to fail,"

Olson said. "And that is driven by the speculator."