ICE Canada Review: Canola Drops Sharply With Spec Selling

By Phil Franz-Warkentin, Commodity News Service Canada
Sept. 26, 2012
Winnipeg – ICE Futures Canada canola contracts  closed sharply lower on Wednesday, as heavy fund long liquidation saw  prices drop well below their former support levels.
Losses in the CBOT soy complex provided the catalyst for the  heavy fund selling in canola, with a move below chart support  triggering some additional stops along the way, according to  participants who noted that fund traders were holding very large long  positions in canola.
A general sense of risk aversion in the outside financial  markets, the advancing US soybean harvest, and improving South  American weather conditions added to the bearish tone in canola, said  traders.
However, scale-down commercial pricing did provide some  underlying support, as end users remain concerned that Canadian  supplies may not be enough to meet the projected demand this year.  Basis levels were said to be improving in western Canada, as exporters  and domestic processors look to encourage more farmer sales.
The weaker Canadian dollar, which was down by about half a cent  relative to its US counterpart, also helped slow the declines in  canola.
About 22,635 canola contracts were traded on Wednesday, which  compares with Tuesday when 11,986 contracts changed hands. Spreading  accounted for about 8,148 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     595.10    dn 13.70

Jan     598.50    dn 13.60

Mar     597.50    dn 14.40

Milling Wheat     Oct     295.50    dn  3.10

Dec     300.70    dn  3.10

Durum             Oct     311.90    unch

Dec     316.40    unch

Barley            Oct     250.30    unch

Dec     255.30    unch

Commodity futures

Futures Prices as of May 21, 2013

Canola Price Change
November595.1013.70
January598.5013.60
March597.5014.40
Milling Wheat Price Change
October295.503.10
December300.703.10
Durum Price Change
October311.90
December316.40
New Barley Price Change
October250.30
December255.30

Prices are in Canadian dollars per metric ton

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