The outlook for the new ICE Future Canada’s wheat futures market isn’t great, according to Neil Townsend, the Canadian Wheat Board’s North American market analyst.
The long-running spring wheat futures market in Minneapolis didn’t get enough business before the Winnipeg market launched in January, he said. As a result, Minneapolis wasn’t “liquid” enough — a measure of how easy it is to get in and out of the market — as traders would like.
“Speculators want easy in and easy out,” Townsend told farmers here March 15.
“I won’t prejudge them (ICE) because they say they will be patient, but I don’t see how it turns around quickly for them.
“It’s going to be a struggle and it will take some time.”
The whole spring wheat complex is not as “transparent” as the much larger hard and soft red winter wheat markets in the United States.
The wheat board probably knows the spring milling wheat market better than anyone and will shed some light on it through a new market analysis newsletter being launched next month, Townsend said. Farmers can subscribe for $600 a year; grain companies will pay substantially more.
The board has 75 years of grain marketing expertise and the best weather and crop surveillance in Canada, according to Townsend. The newsletter will be distributed electronically, by fax and by mail.
The wheat board still wants to sign agreements with Western Canada’s grain companies to handle its grain. So far Cargill is the board’s only partner. Talks are underway with Viterra, board president and CEO Ian White said in an interview. The talks are not being disrupted by Viterra’s potential sale, he added.
The board wants to meet producer car shippers the first week of April, to discuss how to work more closely with them, White said.
Almost all producer car shipments have been through the board. Handling producer cars in an open market will take a lot more co-ordination, White said. Knowing grain grades before shipping will be critical, he said.
“And then we’ll have to organize the shipping to meet our sales program,” he said. “What we don’t want — and I don’t think any company wants — is the wrong grades at port.”