By Dwayne Klassen, Commodity News Service Canada
February 26, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished Tuesday’s session on the defensive with some of the downward price action associated with reduced demand from the commercial sector and the generally bearish price tone seen in the outside oilseed sector, market watchers said.
Significant declines were posted overnight in Malaysian palm oil and European rapeseed futures, traders said. Sharp losses were also experienced in CBOT soybean and soyoil futures during Tuesday’s session, helping to weigh on canola.
Sentiment that canola futures were overbought and in need of a correction to the downside, also added to t6he bearish price sentiment in the commodity.
Some commodity fund and small speculative account liquidation of long positions was also evident and further contributed to the price weakness, brokers said. Sell-stop orders were triggered on the way down, which in turn helped to augment the price declines.
A pick up in elevator company hedge selling, tied in part to increased farmer deliveries of canola into the cash pipeline, also added to the downward price slide, brokers said.
Much of the reduced demand for canola came from the export sector, but domestic processors were also seen slowing purchases, brokers said.
The buying back of previously sold positions helped to slow the price drop as did some ongoing concerns about the tight old crop supply situation.
Spreading continued to be a feature of the activity in canola and helped to bolster the volume total.
There were an estimated 29,545 canola contracts traded Tuesday, down from the 30,263 contracts that changed hands during the previous session. Of the contracts that were traded, 23,224 consisted of spreads.
No milling wheat, durum or barley contracts were traded.
Prices are in Canadian dollars per metric ton.
Futures Prices as of December 4, 2013
Prices are in Canadian dollars per metric ton