ICE Canada barley futures show small signs of life

The long dormant ICE Futures Canada barley market saw some actual trade for the first time in nearly a year earlier this month, which may be a sign that there is still some life left in the contract.

While sporadic bids and offers move prices on occasion, there have been no actual trades and no open interest in the ICE Canada barley futures since December 2012. Buyers and sellers finally lined up once again earlier this month, and the contract now boasts 35 open positions. While those 35 contracts are a far cry from the open interest in canola of 180,000, the small sign of life has shelved the obituary for the time being. The December contract is currently quoted at $152.00 per tonne.

The milling wheat and durum contracts remain untraded, with those two grains last seeing any open interest in March 2013.

ICE Futures Canada holds contract committee meetings on a semi-regular basis to discuss the futures, and a desire was expressed at one recent meeting to see more trade in the new grains contracts, said Brad Vannan, president and CEO of ICE Futures Canada. The revised barley contract, and new milling wheat and durum futures contracts were introduced in January 2012.

“There is an ongoing interest in the new contracts, and an ongoing desire to see them be successful,” said Vannan, “but in order for them to be successful there has to be an ongoing effort.” He said that effort proved difficult over the past year, as the merchants dealt with the other changes in the marketplace stemming from the end of the Canadian Wheat Board’s single desk (on August 1, 2012) and the transition to an open market for wheat and barley. Those merchants are now showing more willingness to put in an effort, as the market conditions change and the separation between the U.S. and Canadian markets makes a Canadian hedge option more attractive, said Vannan.

“It’s an evolution, and we’re seeing the emerging steps of that happening,” said Vannan, adding that “there are still some hot coals.”

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