ICE Canada Review: Weather issues lift canola
| 2 min read
| By Dwayne Klassen, Resource News International |
| August 31, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session mainly higher with only the two nearby contracts experiencing any kind of decline. Weakness in CBOT soybean and soyoil values were associated with much of the downward price momentum, while weather concerns provided an upward lift for the further out contracts, market watchers said.
Activity in canola fell into the extremely choppy category as prices moved to both sides of the plus/minus line during the day. Canola contracts were undermined for a good part of the day by the sell-off seen in CBOT soyoil futures with the downturn in CBOT soybean values near the close, amplifying the downward price weakness in the nearby canola futures, brokers said. Declines in Malaysian palm oil and European rapeseed values overnight contributed to the bearish price sentiment in canola. A drop off in demand from the export sector helped to spark some of the downward price action with chart based speculative liquidation orders also limiting the upward price action in canola, traders said. Much of the support seen in canola came from concerns about the delays in harvesting the crop in parts of western Canada and the increased threat of unharvested canola being vulnerable to frost damage, brokers said. A slow down in the level of farmer deliveries helped to generate some strength in canola as did steady buying interest from domestic crushers. Spreading was a feature of the activity and helped to augment the volume total. There were an estimated 9,159 canola contracts traded Tuesday, up from the 7,659 contracts that changed hands during the previous session. Of the canola contracts traded, 2,734 were spread related. Western barley futures were unchanged with no western barley futures traded on Tuesday. On Monday, no barley contracts changed hands. |
