Winnipeg Commodity Exchange Inc. has made changes to its Market Surveillance Policy, removing the spread exemption. This change was effective with the March 2005 Feed Wheat futures contract and will be effective with the May 2005 Western Barley and November 2005 Canola futures contracts.
Prior to the change, market participants were permitted to hold futures positions in excess of the speculative position limits provided that they provided notice to the Exchange of their intentions to utilize the exemption and provided that they were actively offering the nearby spread at the cost of storage or wider.
Going forward, market participants holding nearby futures positions in excess of the allowable speculative position limits must meet one of the following exemptions:
- they are held as a bona fide hedge transaction;
- they are carried for an eligible entity pursuant to the Commodity Exchange Act;
- they are held for the purpose of reclaiming or offsetting Warrants.
The change to the Market Surveillance Policy and the more stringent requirements on holders of long positions that exceed the allowable speculative limits has already evidenced greater convergency between cash and nearby futures in the Feed Wheat futures contract. These changes are expected to provide greater convergence between cash and nearby futures in the Western Barley and Canola futures contracts as the spread exemption takes is removed effective in May for the Western Barley futures contract and in November 2005 for the Canola futures contract.
WCE has position limits in the spot month only.
