By Dwayne Klassen, Commodity News Service Canada
Winnipeg – September 5/12 – Canola futures on the ICE Canada trading platform finished higher Wednesday with the need to cover an aggressive export program by commercials generating the upward price momentum, market watchers said.
Near record levels of canola are expected to be shipped from Canada’s West Coast export facilities over the next couple of months and commercials were aggressively trying to cover those commitments during the session, brokers said. They noted that much of the business was with Japan.
Support in canola also stemmed from rumours of fresh Canadian canola sales to China, although export sources were unable to confirm the speculation.
Strong domestic processor demand contributed to the price strength seen in canola during the session. Brokers noted that the crush pace was expected to pick up now that the summer maintenance schedule of the facilities in western Canada is now over.
Additional gains in canola were associated with the minor downswing in the value of the Canadian dollar and to continued reports of smaller than anticipated canola yield potential.
Commodity funds were also aggressive buyers of the spreads during the session which further lifted canola futures, brokers said.
The absence of significant farmer deliveries of canola into the cash pipeline in western Canada also was an underpinning price influence, traders said.
The upside in canola was restricted by the taking of profits at the highs of the day. The sell-off experienced by CBOT soybean futures also tempered the price gains.
There were an estimated 18,069 canola contracts traded Wednesday, up from the 13,740 contracts that changed hands during the previous session.
There were 3 milling wheat contracts traded with commercials the noted participants. Durum and barley contracts were untraded and unchanged.
Prices are in Canadian dollars per metric ton.
Futures Prices as of May 22, 2013
Prices are in Canadian dollars per metric ton