On Dec. 19, more than a century of yelling, gesticulating and loudmouth moneymaking is expected to end at the Minneapolis Grain Exchange's downtown building.

The exchange's storied and raucous trading pit will likely shut its doors, and the 40-plus traders who make a living shouting buy and sell orders for futures contracts will have to find a new place to wheel and deal.

The Minneapolis Grain Exchange announced Friday it plans to switch to a fully electronic trading system -- the first grain exchange in the United States to do so -- in an effort to meet client needs and increase efficiency. The exchange's 400 members still must vote on the move, though approval is considered nearly certain.

To the throng of traders who gathered for beers at the Little Wagon pub after the closing bell, Friday was the day they'd been dreading. The death of face-to-face trading, known as "open outcry," has been predicted for years, as a growing percentage of traders migrate to electronic trading platforms, but no one knew when the end was coming.

At the Minneapolis Grain Exchange, which opened in 1881, electronic trades now account for more than 70 percent of all trading volume. Even as prices of wheat rose to record highs this spring, the trading pit often seemed like a high-priced meeting room for traders who were conducting most of their transactions online.

"Everyone knew the [trading pit] had been a sick dog for a long time," said Charles Soule, a longtime exchange trader who was on his second pint of beer at the Little Wagon. "It's just no one had the guts to shoot Old Yeller until now."

But as old and antiquated as it is, the trading pit still holds a special place in trader culture and Minneapolis history. The exchange, at 4th Street and 4th Avenue S., helped bring together the farmers, millers and traders in a centralized marketplace in the 1880s. Two years after it opened, it introduced its first futures contract -- hard red spring wheat -- to help stabilize prices so they didn't drop from the oversupply at harvest.

The end of the pit could actually drive down volumes to a point where trading on the exchange becomes less efficient, because fewer speculators are there to buy or sell grain, some local traders argued. Some traders may migrate to competing futures exchanges, like the Chicago Board of Trade, which have greater volume and electronic platforms of their own.

"The guys who are in there every day making a market are not going to do it," said Martin Farrell, a former board member of the exchange and a longtime trader. "Now, they've just told those guys to pack up and go away. That kills markets."

Then there are the job losses, coming at a time when jobs in the financial sector are in short supply. Farrell estimates that 30 to 40 traders and support staff will lose their jobs when the pit closes, less than a week before Christmas. Another 11 people employed by the grain exchange will also lose their jobs.

"Merry Christmas!" exclaimed one trader, sarcastically, as he hoisted a pint at the Little Wagon. "Welcome to Potterville!" yelled another, raising a glass as he referred to the depressed town in "It's a Wonderful Life."

But exchange officials appeared upbeat at a press conference Friday afternoon. With some new incentives, including a fee waiver for floor traders, pit traders will migrate to electronic trading and volumes on the more efficient electronic trading platform might actually increase, said Mark Bagan, president and CEO of the Grain Exchange.

"Our market will become deeper and more liquid," Bagan said.

And possibly cheaper to operate. According to Bagan, the Grain Exchange will generate $500,000 in annual savings and revenue increases by closing the pit. But that wasn't the main driver behind the decision.

"This was not a financial decision as it was how do we grow our marketplace," he said.

Yet Bagan still got a cold reception when he walked onto the floor of the exchange on Friday morning. As he acknowledged, "there wasn't a single person who was cheering" after he told them that the exchange's board of directors had unanimously approved the decision.

One fear is that, in the wake of the closing, seat prices on the Grain Exchange will decline sharply. Already, the asking price for a seat on the exchange has plunged from $222,000 earlier this year to $122,000.

Farrell, who has a seat on the exchange, is worried. "There will be people scrambling to sell their memberships," he said. "A Grain Exchange with less volume isn't worth as much."

But exchange officials insist that the value of memberships is tied to more than just trading volumes. The Minneapolis exchange still remains the only market in the nation for trading hard red spring wheat.

Chris Serres • 612-673-4308