ICE Futures Canada will pull trading of its December 2008 feed wheat futures while a committee looks at potential changes to the ailing futures contract.
“If any recommendations come forward from this committee, it allows us to enact those recommendations sooner,” said Brad Vannan, president and chief operating officer of the Winnipeg exchange.
Vannan said the committee is in place and will work over the summer.
“The intention would be to have changes in place prior to the current (monthly) contracts going off the board,” he said, noting that representatives from producer groups, feed mills, grain companies and brokerage firms will be part of the committee.
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“We tried to cast the net fairly wide to get input from any potential user group.”
While it’s too early to speculate on what changes are coming for the domestic feed wheat contract, there is no doubt that it is chronically ill.
The contract hasn’t traded since late March and open interest is zero in all contract months.
Ken Ball, a broker with Union Securities in Winnipeg, said it’s hard to define why feed wheat trading dried up, but a functioning contract is missed.
“We used that contract quite a bit in years gone by. And we were very disturbed to see it fade,” said Ball, who speculated that commercial traders are now using the Kansas City and Chicago markets to hedge risk.
“For the average farmer, I think they miss the Winnipeg wheat market. It was a little easier for them to use.”
Based on his conversations with members of the feed wheat contract committee, Vannan said there is a feeling that the contract can be revived.
“Everybody seems to be pretty keen on taking a look at the contract,” said Vannan.
“There’s a sense of appreciation for how valuable a tool (it) is.”
