Some of the biggest companies involved in world grain trading have signed up to trade on the Winnipeg Commodity Exchange’s new electronic platform.
And open interest, which is the amount of trade in a contract, has reached record levels in the canola contract. That has satisfied exchange management that switching to electronic trading Dec. 20 will not derail the exchange.
“People are starting to see this in a very positive light,” said exchange president Mike Gagne.
“It shows that people are not afraid to move into electronic trading.”
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The WCE announced that ADM Investor Services, Cargill Investor Services, Citigroup Global Markets, Iowa Grain Co., R.J. O’Brien and Associates, O’Connor and Company, Rand Financial Services, Tenco and UBS Securities will all directly trade WCE contracts on the electronic platform.
Gagne expects to announce seven or eight more players before the conversion takes place.
Trading has been brisk recently, removing fears that business might seize up in the days before the switchover.
Open interest in the January canola contract is well above the former record for that month. That open interest record of 44,083 was set in November 1999.
The January 2005 contract peaked at more than 47,000 open contracts in the first week of December. More than 11,000 positions have been opened in the November 2005 contract.
The final trades by open outcry will occur Dec. 17, with Dec. 20 being the first day of electronic trading.
Gagne said the new players bring serious trading interest.
“They are large corporations involved in futures trading. They want to have access to our markets for their clients.”
The WCE will be the first commodity exchange in North America to go all electronic. A number of commodity exchanges are introducing hybrid open outcry-electronic systems, and non-commodity exchanges around the world often use electronic trading, sometimes entirely. But Winnipeg will be the only one relying completely on computer-entered trades.
