ICE Futures Canada plans to introduce new futures contracts for wheat and barley if federal legislation to end the monopoly of the Canadian Wheat Board is enacted, the agricultural exchange said Wednesday.
On Tuesday, the federal government introduced legislation that proposes to end the Canadian Wheat Board’s monopoly for sales and marketing of Canadian wheat and barley by August 1, 2012. If that legislation is passed, ICE Futures Canada intends to introduce new futures contracts for milling wheat, durum wheat and barley.
The firm said that the new contracts will be modeled on its existing canola futures contract, which has annual trading volume in excess of 4 million contracts (80 million tonnes) and is familiar to Canadian farmers, merchants and processors, and traders. The wheat contracts will be 100 tonnes in size, while barley, like canola, will be 20 tonnes.
ICE Futures Canada expects to publish contract specifications pending regulatory approval from the Manitoba Securities Commission. And, assuming the legislation passes and regulatory approval is granted, the exchange expects to list the new contracts for delivery in October 2012.
“These contracts recognize Canada’s central role in the global agricultural marketplace and they serve an essential role in providing transparent price discovery and risk management tools,” said Brad Vannan, president and chief operating officer of ICE Futures Canada. “Domestic and international market participants have expressed substantial demand for global benchmark futures contracts designed specifically for Canadian milling wheat, durum wheat and barley. We will continue to work with the industry and regulators as these contracts are developed.”