SASKATOON (Staff) – The Winnipeg Commodity Exchange starts trading futures contracts for western barley and flaxseed on March 7.
The price reference point for barley remains Lethbridge, Alta. However, alternate delivery will be based on regional price discounts throughout the barley-growing regions of Alberta, Saskatchewan and Manitoba.
The new contract will be based on delivery certificates backed by firms that are exchange members and are licensed with the Canadian Grain Commission as grain dealers. Farmers who want to deliver against the futures contract can do so by contacting these firms.
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The delivery certificate represents grain within the delivery region, not a specific facility, said John DePape of the exchange. “The delivery certificate system is attractive because it is flexible and based on throughput, reflecting today’s trading environment.”
Effective with the new barley contract, the trading months will be March, May, July, October and December.
For flaxseed, the new pricing region will include an area straddling the southern portion of the Manitoba/Saskatchewan border south of Saskatchewan Highway 6. Alternate delivery will be available in the flaxseed growing area of Western Canada.
The new futures contract will set a price in a region in Western Canada, instead of the terminal location of Thunder Bay, Ont., the current price reference. As a result, the futures price has moved approximately $30 closer to the farm price. “Therefore, the cash basis will be reduced by a similar amount,” DePape said.
The trading months for flaxseed will be January, March, May, July, September and November. The contract price will be based on Canadian flaxseed with a maximum dockage of eight percent, all other specifications to meet No. 1 Canada western flaxseed. Canadian flaxseed with a maximum dockage of eight percent and specifications to meet No. 2 Canada western flaxseed, is also deliverable at $2 a tonne discount.
