ICE Canola Futures Climb Sharply On USDA Report
| 2 min read
| By Dwayne Klassen, Resource News International |
| October 8, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at significantly higher price levels at 9:28 EDT. Much of the upward price momentum was associated with the USDA supply/demand report released early Friday which were deemed as bullish for global oilseeds, market watchers said.
Market participants mainly focussed on the unexpected sharp reduction in US corn output. The USDA pegged the US corn crop at 12.664 billion bushels, far below USDA’s September estimate of 13.160 billion. Projected 2010/11 US corn ending stocks now are expected to fall below 1 billion bu. The USDA also slashed US soybean ending stocks by 85 million bushels. It also reduced harvested soybean acres by 1% from the previous estimate. Additional support in canola came from the buying back of previously sold positions and from the triggering of buy-stop orders on its way up, brokers said. A number of key resistance points were penetrated in the upward price move. Adding to the support in canola was some panic buying by end-users. Some of the speculative buying in canola was also linked to ideas that with corn output in the US down because of poor growing weather, that the same scenario is being played out in canola, analysts said. Some minor weakness in the value of the Canadian dollar was also an underpinning price influence. The advancing canola harvest amid favourable weather conditions helped to slow the upward price action in canola. Profit-taking at the highs was also evident. Position evening ahead of the long holiday weekend in Canada was a feature of the activity in canola as well. The ICE Futures Canada trading platform will be closed on Monday for the Canadian Thanksgiving holiday. As of 9:28 EDT, there were 6,001 canola contracts traded. As of 9:28 EDT, no western barley contracts had been traded. |
