ICE Wheat Contract

[wd9]

Does anyone know how this is going?

[jdepape]

Design committee has met a few times. Design elements have been substantially completed. Couple of points need some additional research. We meet again next week. Once design is complete it goes to Securities Commission for approval.

Launch timing depends on legislation. As soon as it is a done deal (absolutely sure) the contract can be launched. The earlier the better so it can be used for pricing new crop prior to Aug 1.

[btjadenlepp]

Why does it have to wait for the
legislation John?

[btjadenlepp]

Are there revisions happening to the
barley contract? Is barley, wheat and
durum all on the same path in terms of
launch timing?

[jdepape]

Brenda:
First question - the worst thing that ICE could do
is to launch the contract and have traders avoid it
because of concerns that the Feds might soften.
And those concerns are still out there. Even if
the Aug 1 date is changed, that would be a
serious problem. The most prudent approach is
to launch as soon as possible after the CWB Act
is rescinded. On my personal wish list -
legislation voted and done b4 Christmas and the
contracts launched asap thereafter (note - MY
PERSONAL wish - not necessarily the track ICE
wants. I'm not speaking for them.)

Durum and barley contracts also on track - same
timing as far as I can tell.

Although the barley contract could be offered
anytime, the conventional wisdom is to wait until
the market is open (like the wheat contract) -
better to kick off with critical mass.

[btjadenlepp]

Sounds good, thanks for the update.

[wd9]

Thankyou!

Just can't post thank you cuz its too short. So thank you again.

[wd9]

Jdepape, do you think feed barley liquidity will improve and there will actually be trades given the mass that will come with wheat and durum? Like today, barley futures traded and unchanged. Doesn't reflect on good price discovery.

Basically, do you think price discovery in all grains and oilseeds will improve with more 'traffic'?

[Wheatking]

What changes are being made to barley too make it more liquid. Will there be a malt futures or is that market to small. Can't be any smaller than oats can it.

[btjadenlepp]

I think the malt barley market structure
is more like large green lentils than like
durum or oats. More conducive to
production contracts than futures. JMO.

www.farmlinksolutions.ca

[jdepape]

Changes are in store for the barley contract as
well. Time will tell whether the changes to the
contract and the removal of the single desk will
bring in volumes. Although it should, it's always
a chicken and egg sort of thing. The guys that
want to see liquidity are the ones that also bring
it. The most important aspect to a futures
contract is trading activity.

The way the malt barley trade works, a futures
contract really doesn't do them much good. Malt
barley is more like a specialty crop in which the
quality parameters changes every year.

Although, I'm told by maltsters that they would
like to see a workable feed barley futures
contract.