Canada’s oldest -- and only -- agricultural commodity exchange is closing its doors.
The Winnipeg Grain Exchange, established in 1887, will shut down for good after its owner, Intercontinental Exchange Inc., transfers the bourse’s only remaining futures contract to New York in July.
Canola futures volume has been rising and the move to Wall Street will provide the best environment for continued growth, said Brad Vannan, the president and chief operating office of the company’s ICE Futures Canada unit.
"The commodity business generally has become less reliant on local presence since all the markets are hosted electronically," Vannan said in an interview. "The trade actually comes in from all over the world and there are significantly more traders already hooked up to our New York markets than our Canadian one."
The specifications of the canola contract will remain the same and it will still be traded in Canadian dollars. Two of the Winnipeg office’s 14 employees will continue to work with the local canola industry after the bourse is closed.
The exchange was established at a time when the capital of Manitoba became known as the ”Gateway to the West." It started a futures market for wheat, oats and flaxseed in 1904. Markets for barley and rye followed in the 1910s. In 2004, it was the first agricultural exchange in North America to begin full electronic trading.
The loss of the bourse follows years of consolidation among commodity-exchange operators around the world. Chicago-based CME Group Inc. -- the owner of the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange -- purchased the Kansas City Board of Trade in 2012. Atlanta-based Intercontinental Exchange acquired the Winnipeg Commodity Exchange in 2007. The Minneapolis Grain Exchange is the last independent grain exchange in North America.
“Things evolve,” Vannan said. “There’s nostalgia attached to the exchange, but there has been for years, and through its entire history the exchange has evolved.”