Chicago Board of Trade
The Chicago Board of Trade is the commodity exchange established in Chicago on April 3, 1848, which standardized grain grades and in 1865 introduced standardized futures contracts, making it one of the oldest futures exchanges in the world.
What happened and why it matters
The Chicago Board of Trade turned grain into a standardized product that could be graded, stored in bulk, and traded without inspecting each farmer's sacks. Grain was first sold by sample; inspection and grading then let wheat from many farms be mixed in elevators and sold by grade, and in 1859 Illinois gave the board power to set quality standards. Forward contracts followed in 1851 and standardized futures in 1865, letting buyers and sellers lock in prices ahead of harvest. Standard product definitions, like GTINs and grades today, are what make commingled inventory and price hedging possible.
Related events
Sources
- Chicago Board of Trade (CBOT) britannica.com
- Chicago Board of Trade en.wikipedia.org