By Dwayne Klassen, Commodity News Service Canada
February 8, 2013
WINNIPEG – Canola futures on the ICE Canada trading platform finished on the defensive Friday with the bearish USDA report and the subsequent sell-off in the CBOT soybean complex associated with the declines, market watchers said.
Additional liquidation in the nearby March future was tied to sentiment that the gains seen on Thursday were way overdone and that the contract needed to correct to the downside.
The taking of profits ahead of the weekend helped to weigh on canola as did the USDA report which failed to reduce soybean output in Argentina as had been anticipated by market participants.
Elevator company hedge selling, spurred on by steady farmer deliveries of canola into the cash pipeline in western Canada, further undermined values, brokers said. Much of the farmer movement was linked to processors and elevators offering strong cash bids for canola.
Some chart based selling on the way down helped to augment the price declines in canola.
The losses in canola were restricted by the tight old crop supply situation for canola, traders said. Steady domestic crusher and exporter demand also slowed the price drop in canola.
Spreading was again a key feature of the volume total in canola. Some of that action was attributed to the rolling of positions out of the nearby March future and into other contracts by the large comodity funds, brokers said.
There were an estimated 36,870 canola contracts traded Friday, up from the 30,903 contracts that changed hands during the previous session. Of the contracts that changed hands, 31,672 were spread related.
No milling wheat, durum or barley contracts were traded. However, durum values were lowered at the close by ICE Canada.
Prices are in Canadian dollars per metric ton.
Futures Prices as of December 6, 2013
Prices are in Canadian dollars per metric ton