Update: CWB wheat basis contracts reinstated

(Resource News International) — Recent volatility in U.S. wheat markets only briefly led the Canadian Wheat Board (CWB) to suspend its new-crop basis contracts. The contracts are now available once again, according to the CWB.

In a brief statement on its web site Tuesday, the CWB
said it had “suspended 2008-09 BPC (basis price contract)
December futures lock-ins today due to extreme market volatility
and expanded trading limits.”

The BPC is a forward pricing option
for wheat that offers producers the opportunity to lock in a
futures price up to a year ahead of harvest. Farmers could lock
in the December 2008 futures from Sept. 4, 2007 until Oct.
31, 2008. The basis lock-in period runs from Feb. 25, 2008
through to the end of October 2008.

CWB spokesperson Maureen Fitzhenry said Wednesday that the
suspension had only been for one day, and the BPC contracts were
available once again Wednesday.

“It’s something that’s never happened before in the history
of those programs,” Fitzhenry said. “Rather than risk the long-
term viability and sustainability of those programs, given that
it would be very difficult to cover your risk in the market, we
took the step of temporarily not offering that option,” she said.

The CWB was hopeful that U.S. wheat markets
would stabilize and it wouldn’t have to suspend the BPC program
again, she said.