|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
Futures Prices as of May 17, 2013
Prices are in Canadian dollars per metric ton