The Mar 01 canola/flaxseed spread began the 2001/02 crop year at approximately $40/tonne, similar to levels seen in the previous three years. However, since then the spread has narrowed to approximately $10/tonne in October 2001 and ended the month of December at approximately $23/tonne.
Contract Enhancements: Winnipeg Commodity Exchange Inc. (WCE) is introducing an enhanced flaxseed futures contract design, to be effective May1, 2002. The enhancements to the flaxseed futures contract are expected to significantly improve the efficiency of the shipment process defined in the contract. These enhancements will allow for greater flexibility in the management of product by the firm making delivery. Some of the changes include new chipping requirements and dockage discounts for dockage over 8%.
A Summary of the new shipping requirements are as follows: Flaxseed warrants are to be generic as to region.
- The flaxseed does not have to be in-store the nominated facility at the time of nomination, however it must be in-store one of the warrant-issuer's elevators registered with the WCE for flaxseed delivery.
- The warrant-issuer will have ten business days, if the nominated location is accepted by the buyer, to move the flaxseed into position for shipment.
- The minimum rate of loading out by rail be amended to "the greater of eight hundred metric tones or 25% of the shipment accepted at that location per week.
- Canadian flaxseed dockage over 8% to a maximum 15% shippable at prescribed discounts; all other specifications to meet No.1 Canada western flaxseed.
- Deliverable at a $2.00/tonne discount: Canadian flaxseed with dockage over 8% to a maximum 15% shippable at prescribed discounts; all other specifications to meet No. 2 Canada western flaxseed.
- Discount for dockage: A maximum of 15% dockage is shippable at a discount of $14.00/tonne with the discount dockage between 8% and 15% determined on a proportional basis. No discount applies on dockage levels at or below 8%.
