WCE close: Canola falls as funds take profits

(Resource News International) — Winnipeg Commodity Exchange grain and oilseed
futures closed Tuesday’s session lower with canola dropping sharply on profit taking by
commodity funds, brokers said.

Canola saw a heavy trade with intermonth spreading enhancing the level of
activity.

The total canola volume was estimated at 20,041 contracts, up from Monday’s
9,602 contracts. An estimated 7,210 contracts were involved in the spread trade. Canola
options trade was light with 100 November 430 calls traded.

Canola dropped from the opening despite the fact that the Chicago Board of Trade
opening was delayed by technical problems. At the WCE opening good levels of country
selling pressured the market down. When the CBOT opened the steep declines in CBOT
soy complex futures extended the declines in canola as profit taking appeared sending the
market sharply lower.

The advancing harvest in Western Canada and the lack of export demand
contributed to the price slide, traders said.

Underpinning the market was the sharp drop in the Canadian dollar and the fact
that farmer selling, which was heavy at the opening, slowed as prices fell with farmer
selling in the last hour of trade virtually non-existent, said cash dealers.

Exporters and crushers were the best buyers with heavy elevator company selling
early in the session. However that selling slowed to be replaced by heavy speculative
profit taking and commodity fund liquidation was noted. Traders estimated fund long
liquidation at 4,000 to 5,000 November contracts.

Western barley dropped sharply in step with declines in CBOT corn futures.
Sluggish demand contributed to the price slide. End users were the best buyers on a scale
down with selling coming from both commercials and speculators with commercials the
main sellers. The selling was felt to be profit taking with some fund selling noted in the
trade.

The total barley volume was estimated at 1,049 contracts, up from Monday’s 490
contracts.

Feed wheat declined in light trade as the weak tone in U.S. wheat futures markets
and the lack of interest in the market allowed profit taking to push prices lower in the
mainly commercial trade.

The total feed wheat volume was estimated at 95 contracts, up from just nine contracts
on Monday.