By Dwayne Klassen, Commodity News Service Canada Inc
Winnipeg – June 22/12 – Canola contracts on the ICE Futures Canada platform were trading at higher price levels at midday Friday. Weather issues in the soybean growing regions of the US sparked much o0f the buying that moved canola values up, market watchers said.
Outlooks calling for hot and dry conditions in the US soybean belt, and the resulting upward push in CBOT soybean values, generated the demand for canola, brokers said.
Early gains in canola were fueled by the advances experienced in Malaysian palm oil and European rapeseed values. Stability in the global financial markets also helped to initiate a “risk-on” mentality among investors in commodities, which included canola.
Steady domestic crusher demand and the pricing of old export business to Japan, also contributed to the price strength in canola.
Some light commodity fund demand was also evident, helping to underpin canola.
The upside in canola was restricted by the improved weather conditions on the Canadian prairies for the development of the canola crop, traders said. The upswing in the value of the Canadian dollar Friday and a small pick up in farmer deliveries of canola into the cash pipeline helped to temper the price advances.
Profit-taking also capped the upside price potential.
Spreading was a feature of the activity in canola and helped to augment the volume total. Some evening up of positions ahead of the weekend and the June 27 Statistics Canada planting intentions report was also evident.
There were an estimated 11,055 canola contracts traded at 10:38 CDT.
There were no western barley or durum contracts traded at 10:38 CDT. There were 10 milling wheat futures traded between commercials, brokers said.
Prices in Canadian dollars per metric ton at 10:38 CDT:
Futures Prices as of May 24, 2013
Prices are in Canadian dollars per metric ton