ICE plans to move canola futures from Winnipeg to New York

The scoop:

The company that owns the canola futures exchange based in Winnipeg has announced plans to operate the market from New York.

The story:

Intercontinental Exchange (ICE) sent a notice to market participants on Tuesday saying it intends to transition the canola market from ICE Futures Canada to ICE Futures U.S. on July 29, pending regulatory approvals.

“The move to our New York-based futures exchange and clearing house will provide you with deeper liquidity, reduced administrative costs and a more diversified risk management pool,” says ICE.

ICE Futures Canada launched milling wheat, durum and barley futures coinciding with the end of the Canadian Wheat Board’s monopoly in 2012, but those contracts never gained significant volume. The cereal crop futures were shut down last fall, leaving canola as the only commodity listed on the Winnipeg-based exchange.

ICE has owned the exchange since 2007, when it acquired the Winnipeg Commodity Exchange — Canada’s oldest and only agricultural commodity exchange — for $40 million.

The company says it will still keep “a local presence” in Winnipeg.

What does the move mean for trading or hedging canola futures?

Likely not much at the producer level. The company confirms that canola contract specifications, including currency (Canadian dollar) and delivery point (at par in the Saskatoon area), will not be changing.

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