ICE Canada Review: Outside gains lift canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| August 4, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session mainly higher with much of the strength displayed by the commodity encouraged by the advances in the outside oilseeds, market watchers said. Activity in canola was described as lackluster by market participants.
Canola contracts moved significantly higher early in the day on the heels of new contract highs set in European rapeseed values overnight. Much of those gains were fueled by the drought which is significantly reducing the size of Europe’s rapeseed crop, brokers said. The need to keep a weather premium built into canola due to production uncertainty in western Canada also helped to fuel the price advances. The advances exhibited by CBOT soybean and soyoil futures helped to stimulate the price gains seen in canola. Continued rumors of Mexican demand for Canadian canola helped to underpin values as did steady domestic crusher demand, brokers said. The pricing of old export business to Japan and the buying back of previously sold positions by a variety of market participants also provided good support for canola. The upside in canola was limited by steady elevator company hedge selling, as producers remain good sellers of canola into the cash pipeline, traders said. Firmness in the Canadian dollar also helped to restrict the price advances in canola. The inability of select canola contracts to penetrate technical resistance levels further halted the upward price action in the commodity, traders said. There were an estimated 6,858 canola contracts traded Wednesday, down from the 11,340 contracts that changed hands during the previous session. Western barley futures were unchanged with no contracts changing hands on Wednesday. On Tuesday, no barley contracts were traded. |
