ICE’s milling wheat contracts trade light on first day

New milling wheat, durum and barley contracts began trading on the ICE Futures Canada trading platform on Sunday at 7 p.m. CT, with only milling wheat actually experiencing any trade during its first day of activity.

One October milling wheat contract traded at $257.20 per tonne, while two December contracts traded, one at $264 and one at $265, an ICE Futures Canada official confirmed. No trades occurred in the new durum or barley futures.

While no trades occurred in durum, the highest bid was quoted at $261.10 per tonne, with the lowest offer at around $275.

"At least there was some trade today in the new contracts," said Tony Tryhuk, manager of the commodity trading division at RBC Dominion Securities in Winnipeg, acknowledging the trade was certainly not a large-volume total.

It may take a bit of time for the milling wheat, durum and barley contracts on the ICE platform to gain some momentum, he said.

"I think that as time moves forward and as grain companies start signing forward contracts, the volume and open interest in these futures will increase, with the bid/ask spread also tightening," Tryhuk said.

He also pointed out that the new milling wheat, durum and barley contracts are also based out as far as October and December and not on a nearby month.

"If the new contracts were based on March 2012 listing rather than October 2012, I think you would have seen a lot more participant interest," he said.

Winnipeg grain company Richardson International participated in the new milling wheat and durum contracts with orders on Sunday evening, and "we were able to close some transactions during the business day on Monday," Terry James, the company’s vice-president for export marketing, said in an ICE release Monday afternoon.

ICE Futures Canada president Brad Vannan was not immediately available for comment on Monday’s first day of trade with the new contracts. In the same release Monday afternoon, he said ICE appreciates the participation of the industry in the new contracts.

However, he has previously indicated that the new futures were generating "considerable interest" from many potential market participants including grain companies, commission houses, speculators, farmers and international industry participants in Europe and the U.S.

The Canadian government passed legislation in December 2011 ending the Canadian Wheat Board’s longstanding single-desk marketing powers for Prairie wheat, durum and malting barley as of Aug. 1, 2012.

As the legislation moved forward over the latter half of 2011, ICE Canada worked in conjunction with industry participants to develop futures contracts for use under the new open market.

The durum futures in particular was said to have generated broad interest, which Vannan described at the time as "very encouraging."

— With files from Network staff.

About the author

Glacier FarmMedia Feed

GFM Network News

Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.


Stories from our other publications