By Dwayne Klassen, Commodity News Service Canada
Winnipeg – August 31/12 – Canola futures on the ICE Canada trading platform ended Friday’s session mainly higher with steady domestic crusher demand and the need to play catch-up to the recent gains seen in CBOT soybean values, behind the upward price action, market watchers said.
Canola has been trading at a wide discount to soybeans as of late and the advances seen Friday in the commodity were seen as an attempt to close the gap, traders said. Canola normally trades at a premium to soybeans.
Activity was described as volatile given that few participants wanted to be holding large positions ahead of the Labour Day holiday weekend. Exchanges in Canada and the US will be closed on Monday, September 3 for the holiday.
The “blue moon” along with US Federal Reserve Chairman Ben Bernanke’s speech Friday made for some interesting gyrations in the market place, brokers said.
Continued concerns about the smaller than anticipated yield potential in the advancing canola harvest in western Canada helped to spur some of the price gains, traders said.
The pricing of old export business by commercials and a drop off in the level of deliveries of canola by farmers into the cash pipeline also helped to fuel some of the buying interest, brokers said.
The upside in canola was restricted by the taking of profits at the highs of the day. Favourable weather for the advancement of the harvest in western Canada also capped the upside price potential. Losses in CBOT soyoil values also tempered the upside in canola.
The upswing in the value of the Canadian dollar Friday also tempered some of the buying interest.
There were an estimated 11,610 canola contracts traded Friday, down from the 12,586 contracts that changed hands during the previous session.
There were 4 milling wheat contracts traded with commercials the main participants. Durum and barley contracts were untraded and unchanged.
Futures Prices as of May 22, 2013
Prices are in Canadian dollars per metric ton