WCE close: Canola lifted by CBOT soy gains

(Resource News International) — Winnipeg Commodity Exchange grain and
oilseed futures closed Thursday’s session mixed with canola rallying moderately in the
wake of the big surge up in Chicago Board of trade soy complex futures, brokers said.

Canola saw a very heavy trade with intermonth spreading accounting for the
majority of the canola volume. Commercials were the main participants in the spreads as
they continue to pare down their position ahead of November becoming the cash month, with
commodity funds thought to have traded about 2,000-3,000 spreads. Exchange position
limits on cash month positions prompted the commercial rolling.

Traders are estimating that regular commodity funds are now long 15,000 to 25,000
January contracts while index funds are long 10,000 to 15,000 January futures. They generally
feel that the fund position in November is zero or very close to zero.

The total canola volume was estimated at 26,776 contracts, up from Wednesday’s
19,368 contracts, including an estimated 20,226 contracts that were involved in the
spread trade.

Canola futures posted moderate gains, lifted by the big surge higher in the CBOT
soy complex. Talk of fresh export business also gave support, although exporters could
confirm no fresh export activity.

Keeping the gains in canola smaller than the U.S. market was the firm Canadian
dollar, the sluggish pace to export movement and increased farmer selling, analysts said.

Cash dealers linked some of the farmer selling to the need to meet fall expenses.
“They’re (farmers) not really happy about the prices, but they have to pay the bills”, said
a cash broker.

Crushers were felt to be the best buyers, with exporters also thought to be pricing.
Commercials were the principal sellers with elevator company hedging noted. Locals
and commission houses appeared on both sides of the outright trade with participants
feeling they were net buyers.

Western barley futures closed higher in moderate trade with intermonth spreading
accounting for the bulk of the activity. Gains in CBOT corn gave support, although end-user demand was unaggresive keeping the advance small, brokers said.

The total barley volume was estimated at 2,406 contracts, up from 693 contracts on
Wednesday, including an estimated 2,152 contracts involved in the spread trade. The
bulk of the spread activity reflected funds rolling their December contracts into March ahead of
the end of the month.

Feed wheat ended lower in light trade as liquidation trade continued amid a lack of
interest in the market, traders said. Weakness in U.S. wheat markets pressured values
down as the total wheat volume was estimated at 80 contracts, up from no futures trading
volume on Wednesday.

WCE closing prices, Oct. 25, 2007

Spread trade prices. “Volume” represents the number of spreads.