ICE Futures Canada’s new durum contract has the support of grain marketer Toepfer Canada.
Company president Lawrence Yakielashek said he hopes other grain companies will join his using the contract to hedge risk, but added many of Toepfer’s buyers won’t likely use it because they are cash traders.
ICE chief executive officer Brad Vannan said farmers, grain companies and processors all encouraged ICE to launch a durum contract because of the unique supply and demand fundamentals for the crop.
“They really wanted it,” he said.
It might not be trading much yet, but Vannan said more tangible interest should appear once the new crop year is close.
Yakielashek echoed that sentiment, saying he wasn’t worried about present low volumes.
Vannan acknowledged that spring wheat futures could be used to hedge durum in some circumstances, such as including it in a contract.
However, he said most of the durum industry wants a hedging tool that is specific to durum and doesn’t have a built-in class basis risk.
