ICE Canada Review: Production Loss Aids Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| July 7, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session with strong advances. Gains were influenced by concerns about reduced canola output due to adverse weather across the Canadian prairies, market watchers said.
The wet weather across much of western Canada and the dryness issues in the northern canola growing regions of Alberta are believed to have cut Canada’s canola production by at least 30%, brokers said. Some felt further reductions in yield output for canola were in the cards. The reluctance of producers to deliver canola into the cash pipeline, given the crop’s uncertainty, also helped to fuel some of the upward price momentum seen in the commodity, traders said. Gains in canola also came on the heels of steady domestic crusher demand and the need to price old export business to Japan. The penetration of key technical resistance in the November canola contract also was an underpinning price influence. Some of the buying in canola also came from the significant advances seen in CBOT soybeans and soyoil. The buying back of short positions was also a supportive price feature for canola, brokers said. The strength in canola was restricted in part by bouts of profit-taking from a variety of market participants and the upturn seen in the value of the Canadian dollar, traders said. There were an estimated 8,898 canola contracts traded Wednesday, up from the 6,940 contracts that changed hands during the previous session. Western barley futures were unchanged and untraded. On Tuesday, no barley contracts changed hands. |
