ICE Futures Canada has made some small changes to its canola, durum, milling wheat and barley contracts following the challenges with rail service over the last year.
A notice sent to market participants on Thursday outlined several amendments regarding shipping that apply in instances where there could be physical delivery against a contract.
President and Chief Operating Officer Brad Vannan says the changes were not made in response to any specific problems arising, but to clarify terms in situations where there may be limitations on rail service. That could include cases when railways choose to not provide any service to certain shipping corridors, as was the case with rail movement to Thunder Bay and to the U.S. for a period last winter.
While the changes will mainly affect grain companies, Vannan notes their contract committee is continually examining how their contracts can be improved for all participants.
The amendments include, but are not limited to, the following areas:
- The Delivery Certificate Holder may now specify a method of conveyance on the Call For Shipment form (Annex 15.C).
- For rail shipments, the Warrant Issuer must identify known restrictions or limitations on rail service from a nominated location, and only nominate locations where there is a reasonable expectation of rail service. This identification is to occur on the Shipment Nomination Form (Annex 15.E).
- For rail shipments, the Warrant-Issuer must request from the railway that their railcar allocation be used, although the railways will still make the final determination in this area.
- New alternative resolutions have been added, for delays in rail shipment that are identified after a location is nominated and accepted.
- Greater clarity has been provided on the Warrant Issuer’s prioritization of loading Exchange rail shipments versus other grain shipments to the same corridor.
- Changes have been made to the railcar ordering timeframe.
- The maximum quantity nominated for a particular location has been changed from a daily load-out calculation (10x the daily capacity) to a straight volume determination (two full car spots).
- The amount of freight charges for which the Delivery Certificate Holder is obligated to pay, when the shipping location is modified, has been defined.