SASKATOON – The Winnipeg Commodity Exchange has set a new record in annual trading volume with a month still left in the crop year.
By the end of June, the WCE had reached 1.725 million trades of futures and options contracts, surpassing the previous record of 1.72 million set in 1993-94.
No single factor can account for the increase in activity, said Darwin Lockhart, WCE market information manager.
“We’ve had our slow days like any market and we’ve had our good days. But this year we just had more really good days than really slow days,” he said.
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One factor was the over-heated U.S. grain market.
“There are a lot of people in the market who are not usually in the market,” he said. “There is speculative interest. They see corn going through the roof so what happens in Chicago backs up into ours.”
Contract changes approved
Another factor is the good reception traders have shown to changes the exchange has made to some of its contracts.
Since 1989, three barley contracts have been reduced to one.
The Western Barley Contract saw its volume increase by 60 percent to 222,572 trades compared to the same period last year.
“The people who trade barley are saying: ‘This works for me. I understand it and it reflects what I want it to reflect, so I am going to trade it,’ ” Lockhart said.
Canola heavily traded
The canola contract was also heavily traded. To date, there have been 1.135 million trades, well above the 980,850 traded in the same period last year.
The exchange also saw introduction of the new pea contract in November. There have been 17,677 trades so far.
The flax futures contract saw a decline of about 11 percent to 106,036 trades and feed wheat saw an increase of almost 14 percent to 166,487.
The rye contract was delisted and the oats contract is practically de-listed with no trades in June and May, he said. But a new contract is being developed.
Lockhart said it was impossible to say if more farmers are using the exchange, but knowledge of how the market works is spreading among producers, he said.
“Derivatives or futures contracts, or however you want to phrase it, are being accepted. They are a risk tool and with the cost of farming these days and the cost of commodities, you want to protect yourself as much as you can,” he said.
