WINNIPEG – The Winnipeg Commodity Exchange is looking forward to more business if the government accepts recommendations to remove feed barley from the Canadian Wheat Board sales monopoly.
The exchange’s board of governors met July 10 to talk about the report of the Western Grain Marketing Panel, which proposed releasing feed barley to the fortunes of the open market.
The governors agreed to hire Sparks Companies Inc. to lay more groundwork for an international barley contract.
Exchange spokesperson John DePape said the WCE is also looking at increasing its staff. As well, three companies have asked about joining the exchange since the announcement.
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“We think the opportunities here are fairly significant,” said DePape in an interview.
Exchange president Fred Siemens said in a news release that he hopes federal agriculture minister Ralph Goodale moves quickly on the panel’s recommendations.
“Uncertainty creates market volatility, which results in additional price risk to farmers and the industry,” he said.
Trader Don Roberts said he was pleased but not surprised at the panel’s recommendations.
“The word I was hearing was that barley was going to the open market,” he said, adding he thinks it’s only a matter of time before malting barley enters the open market fray.
Domestic barley traded the $5 limit higher last Tuesday when the panel’s report was released, and rose a bit more later last week.
“We find that letter (to farmers) a little disconcerting,” Roberts said, referring to Goodale’s plan to send out letters to farmers seeking opinions on the panel’s proposals. He said he was hoping for quick action.
The exchange already trades a domestic feed barley contract. It decided earlier this summer to work on international wheat and barley contracts in case the wheat board lost its monopoly on buying and selling the grains.
Sparks is expected to report to the board of governors at its September meeting.
“It may seem quick, but you’ve got to remember, we already have a barley contract here,” he said.
DePape said the exchange will also proceed with developing an international wheat contract, even though the Canadian Wheat Board will retain its monopoly on the grain.
