WCE close: Canola up on CBOT soyoil surge

(Resource News International) — Winnipeg Commodity Exchange grain and
oilseed futures closed Wednesday’s session higher with canola rallying in step with the
move by Chicago Board of Trade soyoil futures to highs unseen in over 30 years, brokers
said.

Canola saw an active trade with intermonth spreading augmenting activity right
across the market.

The total canola volume was estimated at 15,888 contracts, up from Tuesday’s
13,510 contracts, with an estimated 5,386 contracts involved in the spread trade.

Canola rallied sharply in response to the strong upward surge in CBOT soyoil
futures. CBOT soyoil advanced on the move to record high prices by crude oil.

Contributing to the gains was the scale-up nature of hedge selling. Bullish technical
signals prompted strong speculative buying, traders said.

The advance was slowed by the very strong Canadian dollar, the large supply of
canola in commercial hands and the lack of fresh export demand. Exporters indicated that
significant Chinese canola buying is about US$35 per tonne below current market
values.

Crushers were strong buyers, although traders felt speculators were the best buyers.
Besides local and commission house buying, there was some commodity fund buying in
the market. Exporters were only routine buyers.

The selling was mainly commercial with elevator company scale-up hedging noted.
There was also some commercial selling on ideas that canola is overvalued.

Western barley posted moderate gains in active trade. The bulk of the activity was
the rolling of long December future positions into the March contract ahead of the end of the
month by index funds. The gains in CBOT corn and slow country movement gave
support, traders said.

The total estimated barley volume was 3,683 contracts, down from 6,633 contracts
on Tuesday with an estimated 3,444 contracts involved in the spread trade.

Feed wheat saw small gains in light trade as liquidation trade continued amid a lack
of any interest in the market, brokers said.

“We’re taking open interest to zero here” in feed wheat futures, said a trader.
“Open interest has dropped almost every day for the past month,” he added. The total
feed wheat volume was estimated at 293 contracts, down from 603 contracts on Tuesday.

WCE closing prices, Oct. 31, 2007, Canadian dollars per tonne.

Spread trade prices, in Canadian dollars. “Volume” represents the number of
spreads.