ICE Canola Settles Mixed, Profit-taking Erodes Advances

By Dwayne Klassen, Commodity News Service Canada

January 23, 2013

WINNIPEG – Canola futures on the ICE Canada trading platform finished mixed Wednesday after trading at higher price levels for the bulk of the session. Early strength had been spurred on by the downswing in the value of the Canadian dollar and the emergence of fresh demand. The taking of profits and the losses in CBOT soybean and soyoil futures eroded the advances and took some contracts lower, market watchers said.

The Canadian dollar weakened to par and below parity with the US currency during the day, sparking some fresh speculative buying interest in canola, traders said. The weak Canadian unit also increased demand from both the domestic and export sectors. Brokers noted that there were rumours of fresh export sales for both Canadian canola seed as well as Canadian canola oil. Confirmation of the business, however, was not available.

Some early buying in canola was also linked to the overnight advances experienced by Malaysian palm oil futures.

Chart-based buying by commodity funds was also evident during the day, helping to generate some of the upward price momentum in canola, brokers said.

The upside in canola was restricted by the taking of profits by a variety of market participants late in the session. The declines posted by CBOT soybean and soyoil values further tempered the gains. Additional weakness in canola came from steady elevator company hedge selling, as farmers continue to deliver canola into the cash pipeline in western Canada. Elevator companies were said to be offering C$14.00 a bushel for canola across most of the Canadian prairies, which was seen as a trigger point for movement.

Spreading was a feature of the activity in canola and contributed to the volume total.

There were an estimated 36,267 canola contracts traded Wednesday, up from the 35,622 contracts that changed hands during the previous session. Of the contracts that changed hands, 23,516 were spread related.

No milling wheat, durum or barley contracts were traded.

Prices are in Canadian dollars per metric ton.

Commodity futures

Futures Prices as of April 24, 2014

Canola Price Change
March605.800.80
May594.400.10
July583.801.50
Milling Wheat Price Change
March291.00
May294.00
Durum Price Change
March312.40
May316.40
New Barley Price Change
March241.50
May242.50

Prices are in Canadian dollars per metric ton

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