ICE Canada Review: Soyoil Weakness Fuels Canola Drop
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| November 17, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session on the defensive with the continued downtrend in CBOT soyoil futures encouraging the price slide, market watchers said. The late day sell-off in CBOT soybean contracts also prompted some additional selling in canola.
The unloading of long positions by locals and speculative fund accounts further undermined canola futures. Activity in canola was described by market participants as volatile. Spreading was only a minor feature of the volume total seen in canola. Elevator company hedge selling in anticipation of a pick up in farmer deliveries of canola into the cash pipeline helped to weigh on prices, brokers said. A drop off in domestic processor demand due in part to a downturn in profit margins, contributed to the price weakness seen in canola, traders said. Some early support in the nearby canola contracts had come from talk of fresh export business with Mexico. However, confirmation of the sale was not available. Small gains overnight in Malaysian palm oil and European rapeseed futures had also provided some small support for the nearby canola contracts, brokers said. A slight easing in the value of the Canadian dollar during the session was also a minor underpinning price influence for canola, traders said. There were an estimated 16,393 canola contracts traded Wednesday, down from the 19,582 contracts that changed hands during the previous session. Of the contracts traded, 3,365 were spread related. Western barley futures were unchanged and untraded Wednesday. No western barley contracts traded on Tuesday |
