The Winnipeg Commodity Exchange is developing a new futures contract for canola meal.
It’s one of several new projects exchange staff and members are working on in their ongoing effort to increase the number of contracts traded at the exchange and diversify from trading strictly agricultural commodities.
Marketing director Bruce Love said the exchange is fine-tuning the contract terms for the proposed canola meal contract.
Next, it will discuss the contract with canola meal end-users.
Crushers and buyers of canola meal can currently hedge their price risk using soymeal futures traded at the Chicago Board of Trade.
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However, Love said the price difference between canola meal and soymeal futures is not constant. Exchange research shows there’s enough volatility in the basis to support a canola meal contract.
Love said he hopes to take the contract to the exchange’s board of directors in the next few months for final approval.
Work on new lumber futures contracts also continues.
Love said a survey done with C.C. Crow Publications, a well-respected price and market reporting information service in Oregon, showed there is a need for three new softwood lumber contracts.
Love said markets for various species of softwood lumber have a large number of participants and a lot of price volatility.
There is one lumber futures contract for white spruce-pine-fir at the Chicago Mercantile Exchange, priced for Prince George, B.C., delivery.
Love said the exchange is exploring opportunities with U.S. partners for the lumber contracts.
But he said he could not elaborate because of confidentiality agreements.
