ICE Canada Review: Canola Up With Spec, End User Buying

By Phil Franz-Warkentin, Commodity News Service Canada
Sept. 19, 2012
Winnipeg – ICE Futures Canada canola contracts  closed higher on Wednesday, with concerns over tightening supplies  in western Canada and spillover from the corrective bounce in CBOT  soybeans providing support. Speculators and commercials were both  noted buyers, as they took advantage of recent weakness in the grains  and oilseeds to book some coverage.
Yield projections continue to deteriorate across parts of  western Canada as farmers move forward with their harvest operations.  As a result, demand will need to be rationed heading through the crop  year, which helped support canola, said a broker.
Gains in CBOT soybeans did provide spillover support for canola  as well, although canola was already stronger on Tuesday when soybeans  were still softer, and did not have as much room to correct higher  on Wednesday.
Steady farmer deliveries of previously contracted supplies did  temper the gains in canola, said participants. However, farmers were  said to be reluctant to make any new sales as they contemplate the  likelihood of smaller crops.
The strength in the Canadian dollar did remain a bearish price  influence overhanging the canola market. The potential for a large  South American soybean crop to resupply the global oilseed market also  limited the upside potential, said traders.
About 10,045 canola contracts were traded on Wednesday, which  compares with Tuesday when 11,699 contracts changed hands. Spreading  accounted for about 4,536 of the contracts traded.
Milling wheat futures were untraded, although prices were  revised higher after the close. Durum and barley were untraded and  unchanged.
Settlement prices are in Canadian dollars per metric ton.Price      Change

Canola            Nov     634.60    up 8.20

Jan     638.20    up 8.00

Mar     638.30    up 6.90

Milling Wheat     Oct     294.00    up 1.80

Dec     299.80    up 1.80

Durum             Oct     310.10    unch

Dec     314.60    unch

Barley            Oct     250.30    unch

Dec     255.30    unch

Commodity futures

Futures Prices as of May 17, 2013

Canola Price Change
November634.608.20
January638.208.00
March638.306.90
Milling Wheat Price Change
October294.001.80
December299.801.80
Durum Price Change
October310.10
December314.60
New Barley Price Change
October250.30
December255.30

Prices are in Canadian dollars per metric ton

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