|By Phil Franz-Warkentin, Commodity News Service Canada|
|Sept. 26, 2012|
|Winnipeg – Canola contracts on the ICE Futures Canada platform were sharply weaker at 10:53 CDT Wednesday, dropping below psychological support as a sell-off in CBOT soybeans spilled over to weigh on values.
Speculative long liquidation was behind much of the selling pressure in canola, with the move below C$600 per tonne in the November contract triggering some sell-stops along the way, said participants. Fund traders were holding very large long positions in canola that they were bailing out of, said a broker.
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, according to a trader.
Scale-down commercial pricing did provide some underlying support, as end users remain concerned that Canadian supplies may not be enough to meet the forecast 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 also helped slow the declines in canola, said traders.
At 10:53 CDT, about 14,000 canola contracts had changed hands. The November/January spread was a feature of the activity as participants continue to roll out of the front month.
Milling wheat, durum, and barley futures were all untraded and unchanged.
Prices in Canadian dollars per metric ton at 10:53 CDT:Price Change
Canola Nov 591.80 dn 16.70
Jan 596.40 dn 16.20
Mar 594.90 dn 17.00
Milling Wheat Oct 298.60 unch
Dec 303.80 unch
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