By Dwayne Klassen, Commodity News Service Canada
Winnipeg – November 2/12 – Canola futures on the ICE Canada trading platform finished Friday’s session with significant declines with much of the downward price action associated with the bailing out of long positions by speculative and commodity fund accounts, market watcher said.
Some of that selling was inspired by chart signals, especially as technical support levels in a number of contracts failed to hold. The sell-off in canola was also tied to the taking of profits after recent advances. The activation of sell-stop orders exaggerated the price drop.
Additional bearish sentiment in canola came from the sell-off experienced by CBOT soybean and soyoil futures. Losses overnight in Malaysian palm oil and European rapeseed futures also stimulated some of the price weakness, traders said.
The declines in canola were also linked to sentiment that the commodity is overvalued in comparison to the other oilseeds.
Some of the selling that emerged in canola during the session was linked to pre-weekend hedging by elevator companies, who were anticipating an increase in canola deliveries by farmers, brokers said.
The losses in canola were offset in part by scale down commercial buying. Much of that interest was said to be covering old export business as well as some domestic crusher needs, traders said.
The buying back of previously sold positions by speculative accounts near the close helped to temper the price declines.
There were an estimated 13,001 canola contracts traded Friday, up from the 9,084 contracts that changed hands during the previous session. Of the contracts that changed hands, 3,604 were spread related.
Milling wheat, barley and durum contracts were untraded and unchanged.
Prices are in Canadian dollars per metric ton.
Futures Prices as of May 17, 2013
Prices are in Canadian dollars per metric ton