ICE Canola Contracts Recover, CBOT Upturn Supportive
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| February 23, 2011 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly higher price levels at midsession after starting the day off on a mostly weaker footing. Carryover selling from the limit down losses seen on Tuesday accounted for the early declines, but canola values recovered when CBOT soybean values started to rally, market watchers said.
Ongoing concerns about the political uncertainty in Libya and other nations also sparked some early selling by nervous speculative accounts, brokers said. ICE Futures Canada announced that the daily trading limit in canola is expanded to C$45 per metric ton on Wednesday, from C$30 per ton. Some of the early weakness in canola also came on the heels of losses seen overnight in Malaysian palm oil and European rapeseed. Some of the early declines in canola were also linked to panic selling by producers, who were trying to take advantage of still fairly strong cash bids, traders said. The upturn in canola was helped along by renewed demand from domestic processors and by steady commercial demand, believed to be pricing old export business to Japan. Weakness in the Canadian dollar was also viewed as an underpinning price influence for canola. Oversold price sentiment prompted some minor buying of canola as did the continued upturn in global crude oil futures. Traders said there were ideas that with the strong crude oil values, alternatives such as biodiesel and ethanol will also see a jump in demand. Spreading was a big feature of the activity in canola and accounted for the bulk of the volume total, brokers said. There were an estimated 14,909 canola contracts traded at 10:27 CST. Of the contracts traded, 14,518 were spread related. There were no western barley futures traded as of 10:27 CST.
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