|By Phil Franz-Warkentin, Commodity News Service Canada|
|Sept. 28, 2012|
|Winnipeg – ICE Futures Canada canola contracts closed higher on Friday, seeing a corrective bounce to end the week after posting large declines recently.
Gains in CBOT soybeans accounted for some of the spillover strength in canola, according to participants. While the USDA quarterly stocks report released this morning was bearish for soybeans, the numbers were surprisingly bullish for corn and wheat. The resulting rally in the grains spilled into the oilseeds, including canola.
Ongoing concerns that Canada’s canola crop may not be large enough to meet demand this year were also supportive for canola, as exporters and domestic crushers were showing solid demand, said traders.
A lack of significant farmer selling and the softer Canadian dollar provided further support for the canola market.
While canola was overdue for a corrective bounce after recent declines, the overall technical bias is still pointing lower, said an analyst. As a result, the attempt to take prices higher was also seen as a selling opportunity from a chart perspective. The November contract was unable to hold above the psychological C$600 per tonne level on Friday, which should keep that chart point as a key resistance level going forward.
About 24,448 canola contracts were traded on Friday, which compares with Thursday when 21,622 contracts changed hands. Spreading accounted for about 16,636 of the contracts traded.
Milling wheat futures were untraded, but revised lower after the close. Durum and barley futures were untraded and unchanged.
Settlement prices are in Canadian dollars per metric ton.Price Change
Canola Nov 597.70 up 5.80
Jan 601.80 up 6.20
Mar 601.40 up 5.80
Milling Wheat Oct 300.50 up 9.80
Dec 305.70 up 9.80
Durum Oct 311.90 unch
Dec 316.40 unch
Barley Oct 250.30 unch
Dec 255.30 unch
Futures Prices as of May 17, 2013
Prices are in Canadian dollars per metric ton