Winnipeg Commodity Exchange Inc. Makes Significant Changes to Flaxseed Futures Contract

Strategic Insights -

The Winnipeg Commodity Exchange Inc. (WCE) has announced significant changes to the Flaxseed Futures Contract, which are pending non-disapproval from the Manitoba Securities Commission (MSC). The revisions include a switch from U.S. dollars to Canadian dollars, elimination of U.S. origin flaxseed as a deliverable grade, and changes to payment and storage requirements. These changes are modeled after the provisions of the Canola Futures Contract.

Key Takeaways:

  • The WCE has made significant changes to the Flaxseed Futures Contract, including a switch from U.S. dollars to Canadian dollars.
  • The contract now eliminates U.S. origin flaxseed as a deliverable grade and the U.S. delivery region.
  • The delivery location of Thunder Bay, Ontario has been eliminated, and minor modifications have been made to the interior delivery regions.
  • The issuer-owned Warrants now require flaxseed to be owned and controlled in-store or a combination of owned and controlled in-store and up to 25% represented by Deferred Delivery Contracts.
  • The payment process upon delivery has been changed, and "carrying" charges have been increased from $0.06 per tonne per day to $0.12 per tonne per day.
  • The provisions for Merchant Participants to enter into "Handling" agreements and to register as "Deliverable Location Participants" remain unchanged.
  • The revised contract is now pending non-disapproval from the MSC.
  • Upon receipt of non-disapproval, the WCE intends to list December 2004 through July 2005 Flaxseed Futures Contracts.
  • The WCE is soliciting elevator registrations for delivery against the revised flaxseed futures contract.
  • The July and October 2004 flaxseed futures contracts remained on the board for trading under existing contract terms.

Statistics:

  • The flaxseed must be in-store the nominated regular elevator within 2 business days of acceptance by the buyer.
  • The "carrying" charges have been increased from $0.06 per tonne per day to $0.12 per tonne per day.
  • The change in payment upon delivery will affect the seller and buyer processes.
  • The revised contract is pending non-disapproval from the MSC.

Sources:

  • Resource News International via COMTEX, "Winnipeg Commodity Exchange Inc. Makes Significant Changes to Flaxseed Futures Contract" (Copyright 2004 Resource News International News Provided by COMTEX (http://www.comtexnews.com))