By Dwayne Klassen, Commodity News Service Canada
February 5, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished Tuesday’s session on a mixed note, with old crop contracts finding strength from supply tightness, market watchers said. The deferred values were undermined by the absence of demand and by the declines posted in most CBOT soybean and soyoil futures.
The Statistics Canada grain stocks in all positions report for the period ended December 31, revealed slightly tighter than anticipated stocks of canola on farm and in commercial position.
The government agency pegged Canadian canola supplies at 7.371 million tonnes. This figure was at the low end of pre-report expectations and compared with canola stocks on farm and in commercial position at the same time a year ago of 9.686 million tonnes. Market participants said the estimate shows that the current pace of usage is unsustainable and that some serious rationing of demand will need to take place.
Much of the demand continues to come from domestic processors as well as export outlets, who are believed to be covering old sales commitments.
Chart-based buying by speculative and commodity fund accounts contributed to the upward price momentum in the nearby months. Much of that buying was triggered as values continue to push through technical resistance levels.
The upside in canola was restricted by the taking of profits and by the downturn experienced in CBOT soyoil futures during the session. Elevator company hedge selling, tied to steady farmer deliveries of canola into the cash pipeline in western Canada, also accounted for some of the price weakness seen in canola.
Spreading was a significant feature of the activity in canola and contributed to the volume total.
There were an estimated 28,409 canola contracts traded Tuesday, up from the 22,684 contracts that changed hands during the previous session. Of the contracts that changed hands, 24,658 were spread related.
No milling wheat, durum or barley contracts were traded.
Prices are in Canadian dollars per metric ton.
Futures Prices as of December 5, 2013
Prices are in Canadian dollars per metric ton