Milling wheat, durum and barley futures de-listed

Plans for a vibrant Western Canadian futures market for milling wheat, durum and barley similar to canola officially came to an end on Wednesday, as the board of directors for ICE Futures Canada approved the de-listing of the exchange’s three cereal crop contracts.

In a notice to market participants, the Winnipeg-based exchange said its futures and options contracts for the three crops would be de-listed as of trading day October 26, 2017.

In reality, the contracts had been dead for a while. Barley was the last of the three contracts to have any open interest, in late 2016.

The wheat, durum and barley futures were launched in January 2012 in anticipation of the end of the Canadian Wheat Board’s single desk on August 1, 2012.

While offering a delivery location in Western Canada, pricing in Canadian currency, and parameters reflecting the type of wheat grown in Western Canada, the contracts never gained enough open interest or volume to maintain a liquid market.

“When we created the contracts, we did it with the best advice of our contract committee, which is made up of a cross section of the industry, and we basically looked at what we knew of the non-board market at the time. Nobody knew how the marketplace would evolve,” Brad Vannan, ICE Futures Canada’s president and chief operating officer, told RealAgriculture on Wednesday.

The wheat trade gravitated to the existing U.S. contracts (in Minneapolis and Chicago) due to the liquidity they offered and the fact end-use customers were already using them.

“The durum contract we always knew was a bit of a long-shot given the size of the durum crop,” said Vannan. “The barley contract probably had the most interest over the years, but barley seeded acreage has shrunk significantly over the past few years.”

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