WCE close: Hedging trims canola gains

(Resource News International) — Canola futures at the Winnipeg
Commodity Exchange finished Friday’s session mostly higher.
Strength in CBOT soybean complex values had provided good support
for canola throughout most of the session while the strong Canadian
dollar and pre-weekend hedge selling kept some contracts on the
defensive, market watchers said.

Canola finished mostly higher but off the day’s highs. Steady
commercial demand influenced the advances in canola with some of
that interest said to be covering fresh export business being put on
the books, traders said. Gains in CBOT soybean and soyoil values and
the establishment of new contract highs in Malaysian palm oil
futures overnight had further underpinned canola during the session.

Routine exporter pricing of old export business to Japan and
Mexico, along with steady domestic processor needs, further stimulated
the gains.

The advances in canola were trimmed late in the session when
the advances in CBOT values were eroded. Pre-weekend hedge selling
by line companies was also evident near the close and helped
to take canola off its highs, brokers said.

The strong Canadian dollar, which moved to new 33-year highs
against the U.S. currency during the North Amercian trading session,
also helped to trim some of the upward price action in canola,
traders said.

Spreading was again a key feature of the activity in canola and
helped to augment the volume total.

There were an estimated 17,960 canola contracts traded during
Friday’s session, down from 26,776 during the previous session. Of
the contracts traded 13,734 were spread-related.

Western barley values were lower with the absence of fresh
demand and talk of larger-than-expected supplies of feed grains in
Western Canada behind some of the downward price action. The absence
of willing buyers helped to amplify the losses seen in barley,
traders said. Activity was a two-sided commercial affair.

An estimated 1,734 barley contracts changed hands during the
session. On Thursday, 2,406 contracts were traded. Of the contracts
traded Friday, 514 were spread-related.

Feed wheat futures were lower, with poor demand and the lack of
willing buyers helping to generate the downward price slide, brokers
said.

There were no feed wheat contract traded Friday. On Thursday,
80 feed wheat contracts changed hands.

WCE closing prices, Canadian dollars per tonne, Oct. 26, 2007.

Canola spread trade prices. “Volume” represents the number of spreads.