The Winnipeg Commodity Exchange’s feed pea contract will be given a chance to breathe again this fall.
But whether revisions will keep it alive depends on whether enough people use it, say traders and exchange officials.
“Everyone in the trade said that they wanted to see a feed pea contract out there,” said Bruce Love, the exchange’s director of marketing.
“The revision of the contract makes it more reflective of the underlying cash market and adds certainty in the delivery mechanism.”
The old contract last traded in March 2000. It had been revised only one year before.
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The new design, which has not been fully revealed and has not yet been approved by the Manitoba Securities Commission, changes some of the features that users complained about, Love said.
Previously, delivery could occur anywhere in Western Canada, which created uncertainty for users who stood for delivery, Love said.
Now delivery regions are defined across Western Canada and premiums and discounts will reflect the underlying cash market in that region.
The new contract will also better reflect modern grain handling on the Prairies. The old design assumed an eight percent foreign matter. The new design is based on cleaned net tonnes.
A maximum eight percent foreign matter is allowable, with all other quality specifications following Canadian Grain Commission feed pea grade specifications.
Love said he hopes the new contract will work.
“We went out and talked to the industry and they said ‘Yeah, we want it.’ We would have dropped it if they had said they didn’t want it.”
