(Resource News International) — Most industry participants say they’re ready for when grain and oilseed futures contracts at the
Winnipeg Commodity Exchange begin trading on the ICE
platform beginning Dec. 9 at 7 p.m. CT, moving from the current Chicago Board of Trade (CBOT)
platform.
The ICE platform requires one continuous trading session,
and because of that there will be no special pre-open order entry
period, nor any cease of trading between the overnight
session and the daytime session.
With the transition to ICE from the CBOT, there will also be
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Daily price limits for western barley and feed wheat futures
contracts have been increased to $10 from $7.50 and the
matching algorithm on the ICE platform will be first-in-first out
rather than the current priority pro-rate system.
“There will be some transitional issues, which could cause
some market participants to sit back and see how the new trading
platform works out,” said Ken Ball, a broker with Union Securities
in Winnipeg.
Ball also pointed out that the new trading platform will be
quite a bit different from what participants have been currently
working with.
“There are a few individuals who would like to have some of
platform brought over to ICE,” Ball said. “However, while ICE has
been trying to accommodate some of this, there will still be some
features lost as a result.”
Upon transition to the ICE platform, Exchange of Futures for
Physical or EFPs, and Exchange of Futures for Risk or EFRs,
transactions will be entered into new middleware known as
“Iceblock”. EFPs and EFRs entered into Iceblock will then be sent
to the clearing system as a matched transaction.
The current
practice of entering EFPs and EFRs directly into the clearing
system will cease. Strike price multiples on canola options will
be at $5 intervals rather than the varied strike multiples
currently in place.
There was not likely to be much trade in WCE
futures in the overnight session, Ball said, with activity only picking up
once the CBOT begins its day session for soybeans, corn and
wheat.
“The fact that the WCE will keep trading between 6 a.m. and
9:30 a.m. CT now, will, however, prove to be interesting at times,
especially on report days,” Ball said.
He said WCE commodities could move very violently ahead and
just after a report.
Stan Casar, senior vice-president and branch manager for
Fimat Canada in Calgary felt the WCE transition
would go smoothly and most companies have already prepared
for the new trading hours and any changes required to trade WCE
commodities.
“There are at least two things in play, one being that there
comfortable with electronic trading and the second being that the
WCE has been very helpful in organizing the transition and
keeping the process liquid,” Casar said.
He added that ICE is also a big institution and understands
these transitions.
“Almost no change”
Mike Jubinville, an analyst with the farmer advisory service
ProFarmer Canada agreed there should be few problems in the
switch of trading platforms.
“From a producer and investor perspective, there will be
almost no change in how they deal with officials who trade the
commodities on these platforms,” he said.
However, Jubinville acknowledged there is a little
apprehension among WCE market participants.
“A lot of what is ongoing among WCE market participants can
be likened to when the WCE went from a public outcry to an
electronic trading platform,” Jubinville said. “There was a lot
of doom and gloom warnings issued, but it turned out to be
nothing later
the business moved on and has continued unabated
since.”
The move to the ICE platform will be less of
a change than the first move from public outcry to electronics, Jubinville said.
