ICE Canola Contracts Weaken As Market Uncertainty Reigns

Some of the uncertainty is being influenced by the US Securities Commission decision to charge Goldman Sachs with fraud. Reports of other such companies being brought up on similar charges has also created concerns among market participants.

Traders said companies like Goldman Sachs handle a lot of speculative hedge funds, and there are ideas that these participants have been bailing out of all kinds of commodities in order to preserve financial gains.

Losses overnight in Malaysian palm oil helped to stimulate some of the price weakness in canola, with the sharp downturn in CBOT soybean and soyoil values shortly after the opening, adding to the downward price momentum, brokers said.

Sentiment that canola acreage in Western Canada will be at ‘startling’ levels also prompted some of the price weakness seen in the commodity, traders said.

Statistics Canada will release its first look at what producers intend to plant this spring in a seeding survey on April 26.

Speculators were some of the featured sellers of canola in the early activity.

The downward push in canola from the losses in CBOT soybeans and soyoil were being offset by the pull-back in the value of the Canadian dollar, traders said. The weak Canadian dollar was seen encouraging steady domestic crusher demand and the pri cing of old export business to Japan, brokers said.

A drop off in the level of hedges hitting canola by elevator companies was also helping to generate some underlying support, traders said. Producers in western Canada were said to be gearing up for spring seeding operations instead of focussing on marketing canola.

There were an estimated 4,644 canola contracts traded at 10:33 CDT. Of the contracts traded, 1,970 were spread related.

There were 11 western barley futures traded as of 10:33 CDT. The unloading of positions ahead of the May future’s expiration was the key feature of the activity, brokers said.