ICE Canada Grain/Oilseed Rev: Canola Drops On Technicals
| 1 min read
| By Dwayne Klassen, Resource News International |
October 22, 2009
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished the session with significant declines, particularly in the nearby months. Chart-related liquidation orders helped to weigh on canola with the triggering of sell-stop orders on the way down, amplifying the price declines.
"There was an absence of buyers in the canola market which exaggerated the losses even further," a trader said. The declines in canola were helped along by an increase in farmer deliveries to the country elevator system in western Canada, brokers said. Poor crush margins and the resulting lack of demand from the domestic sector helped to depress canola futures. Weakness in CBOT soyoil futures helped to stimulate some of the downward price action. The losses in canola were offset in part by the continued harvest delays in western Canada due to wet field conditions. Light exporter pricing of old business also was an underpinning price influence, brokers said. The pull-back in the value of the Canadian dollar also had generated some underlying support for canola early in the session, but the currency has moved off its lows for the day near the close, erasing some of that strength. Spreading of the Nov/Jan contracts continued to be a key feature of the trade in canola. There were an estimated 19,928 canola contracts traded during Thursday’s trade, down from 24,773 during the previous session. Western barley futures were higher with a pick up in end-user demand providing the support. Traders said it didn’t take much in the way of buying to push values up in the absence of willing sellers. Activity was mainly a two sided commercial affair. An estimated 604 barley contracts changed hands during the session. On Wednesday, 364 barley contracts were traded.
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