Farmers may not have seen many successful contract launches at the Winnipeg Commodity Exchange in recent years, but the exchange has recovered financially from the woes it faced in the early years of this decade.
WCE board chair Lorne DeJaeger says that gives the exchange the chance to look forward again.
“We’ve told management: take advantage of these volumes we see today and grow more volume,” he said.
Developing new contracts today will be a “tough one,” he said, but the exchange will be ready to leap if opportunities appear, such as the Canadian Wheat Board losing its monopoly.
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The Winnipeg exchange’s confident attitude comes after years of lackluster trading volumes that afflicted all the world’s commodity exchanges early in the decade and after widespread prairie droughts, which left little crop for grain companies and farmers to hedge.
The exchange tackled the problems head on, becoming the first North American agricultural commodity exchange to go fully electronic.
It was a controversial step that followed closely the exchange’s decision to “demutualize,” turning ownership and power over to a small number of shareholders rather than the wide range of users that had controlled it before.
Both steps made a lot of people unhappy, but DeJaeger said it was a necessary leap of faith.
“I think the fork in the road came and if you kept on the old way, the end was near,” DeJaeger said.
The WCE is now a private company owned mostly by grain companies rather than a collective owned by its users.
However, DeJaeger said the exchange has been trying to keep its old users on board while at the same time trying to lure new ones. It’s still a local exchange and plans to stay that way.
“There are a lot of companies we work with (in keeping futures contracts relevant to the commercial marketplace),” De Jaeger said.
“They have a lot of say into it…. We would never want to see that change.”
Consolidation has swept the exchange world, with various exchanges merging, but Winnipeg wants to stay Western Canadian.
“We definitely want to see it here in Winnipeg,” DeJaeger said.
