Winnipeg Commodity Exchange Demise Implications

[parsley]

When the WCE, as a Canadian entity, died, farm commodity groups didn't even seem to whimper.

Farmers have lost their sole Canadian market price-discovery mechanism.

Any comments?

[Hopperbin]

I believe they are hoping for an open market on barley. Not sure what to think, I am just watching. Can they improve the WCE? They appear to be trading longer hours. But not much happenning in overnight trading. I would be much more concerned if it was a Chinese company.

[parsley]

Is the new entity a price-discovery mechanism or is it a hedge-fund?

Parsley

[IAMTHEMOLE]

Delivery points are still Prairie based. Saskatoon is Par on all 3 commodities I believe.

[chaffmeister]

the WCE has not "demised". It simply has new owners and the same management. It's sole purpose will be to promote volume.

Increased volume = increased profit.
Increased volume = improved liquidity.
Improved liquidity = lower risk.
Lower risk = greater returns (for farmers and end users).

ICE brings the WCE into the 21st Century: lower cost clearing (economies of scale); state-of-the-art technology providing greater access.

Rather than seeing this as a bad thing, I anxiously await what ICE will do to enhance current instruments and risk tools. (ICE also provides a platform for over-the-counter (OTC) instruments.)

Western Canadian farmers have lost nothing through the sale of WCE.

[TOM4CWB]

Chaffmeister,

Is there any farmer Directors from western Canada over seeing operations?

[chaffmeister]

TOM4CWB:

No.