By Dwayne Klassen, Commodity News Service Canada Inc.
Winnipeg – Feb 3/12 – Canola contracts on the ICE Futures Canada trading platform finished Friday’s session mainly higher with support derived from the advances posted in the CBOT soybean complex and on steady demand from the commercial sector, market watchers said.
Canola values followed CBOT soybean and soyoil values upwards, but early buying had been influenced by the gains seen overnight in Malaysian palm oil and European rapeseed futures, traders said.
The buying back of previously sold positions helped to generate some early support in canola as did news that the soybean crops in Brazil and Argentina were reduced by dry growing conditions, brokers said.
Steady demand from domestic crushers and the pricing of routine export business to Japan by commercial accounts further generated price strength, traders said. There were rumours circulating in the market that some fresh Chinese demand for Canadian canola was being conducted, but confirmation was not available.
Stocks of Canadian canola on farm and in commercial positions as of December 31, 2011, were pegged at 9.294 million metric tons by Statistics Canada Friday morning. That’s down slightly from 9.434 million at the same point the previous year. With Canada starting the year with a much larger crop to begin with, the confirmation of solid end-user demand was seen as supportive. However, market participants said the tightening supplies were already priced into the futures.
The upside in canola was restricted by profit-taking ahead of the weekend and by the upswing in the value of the Canadian dollar.
Elevator company hedge selling, tied to steady farmer deliveries of canola into the cash pipeline, also tempered some of the upward price action.
Spreading was again a big part of the volume total seen in canola.
There were an estimated 37,156 canola contracts traded Friday, up from the 18,621 contracts that changed hands during the previous session. Of the contracts that traded, 33,172 were spread related.
There were no western barley, milling wheat, durum or new barley contracts traded during the session.
Prices are in Canadian dollars per metric ton.
