ICE Canada Review: Canola Up On USDA Sup/Dem Report
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| November 9, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session with significant advances. Strong support was derived from the USDA’s decision to reduces the size of the US soybean crop and to tighten the ending stocks estimate for that crop, market watchers said.
Some evening up of positions ahead of Thursday’s Remembrance Day holiday in Canada was also a feature of the activity. Canola contracts found strong support from the smaller than expected US soybean crop and the resulting sharp advances in both CBOT soybean and soyoil futures, brokers said. New contract highs in Malaysian palm oil and European rapeseed futures overnight helped to influence the upward price action seen in canola. Strong commercial and speculative demand also helped the bullish price tone in canola. Much of the commercial interest was said to be covering strong domestic crusher demand while friendly chart signals and the desire to add to long positions encouraged the speculative buying interest, brokers said. The upside in canola was restricted in part by profit-taking and the firm price tone seen in the Canadian dollar. Elevator company hedge selling also limited the price gains, as they expected farmers to increase deliveries of canola in view of the higher futures prices, brokers said. Spreading was a feature of the activity and helped to augment the volume total. There were an estimated 21,522 canola contracts traded Tuesday, up from the 8,812 contracts that changed hands during the previous session. Of the contracts traded, 7,136 were spread related. Western barley futures were unchanged and untraded Tuesday. No western barley contracts traded on Monday.
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