By Dwayne Klassen, Commodity News Service Canada
January 25, 2013
WINNIPEG – Canola contracts on the ICE Futures Canada platform were trading at higher price levels at 10:19 CST Friday morning with concerns about tight supplies and steady demand fuelling the upward price action, market watchers said.
Nervous short position holders were also starting to buy back their previously sold contracts which in turn was helping to encourage the price advances in canola, brokers said.
The continued downswing in the value of the Canadian dollar added to the friendly price tone, with the weakening currency continuing to attract demand from domestic processors as well as export outlets, traders said.
Rumours continue to circulate that fresh Canadian canola export sales were made during the week, brokers said. Confirmation, however, was not available.
Chart-related buying by commodity funds was also evident and contributed to the upside price push in canola.
The minor upturn seen in CBOT soybean futures was also an small underpinning price influence, brokers said.
The upside in canola was being restricted by scale up elevator company hedge selling, tied to ideas that farmers are attracted to the strong cash bids being offered across most of the Canadian prairies, and have started to deliver canola, traders said.
Profit-taking also capped some of the gains seen in canola.
Spreading was a feature of the activity in canola and accounted for a portion of the volume total.
As of 10:19 CST, about 8,086 canola contracts had traded. Of those contracts, spreading accounted for 4,532 of the trades.
Milling wheat, durum and barley contracts were unchanged and untraded.
Prices in Canadian dollars per metric ton at 10:19 CST:
Futures Prices as of May 24, 2013
Prices are in Canadian dollars per metric ton