Open interest tiny amid CWB doubts, timing

After nearly four weeks of trading, open interest is tiny in the new milling wheat, barley and durum futures and options contracts offered by ICE Futures Canada.

“I don’t think it’s fair to say we were looking for a lot of liquidity at this point in time with the contracts,” said Brad Vannan, president and chief operating officer for ICE Futures Canada.

“The futures are a reflection of the marketplace as a whole, and if that marketplace hasn’t had a chance to fully hatch yet, the futures will also reflect that.”

Open interest in ICE’s milling wheat futures contract was 80 contracts Feb. 15, compared with open interest of 187,475 in ICE Canada’s long-running canola contract.

The lack of trading activity, a pending court ruling that could derail the law ending the single desk, and widespread dryness across the Prairies just two months prior to planting are all considered factors.

So far, the industry has little reason to take futures positions in the new contracts which start with October delivery, said Keith Bruch, vice-president of operations at grain handler and miller Paterson GlobalFoods.

“Buyers are bearish, farmers are bullish and so there just isn’t much liquidity in the marketplace,” Bruch said. “

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