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ICE Canada Grain/Oilseed Review: CBOT Soybeans Lift Canola

| 2 min read

By Dwayne Klassen

 

By Dwayne Klassen, Resource News International

March 10, 2009

Winnipeg – Canola contracts on the ICE Futures Canada platform settled the session mainly higher with strength in the CBOt soybean complex encouraging a good portion of the upward price movement, market watchers said.

Activity in canola was described as light and choppy by traders with a number of market participants taking to the sidelines to await the outcome of Wednesday’s latest round of supply/demand tables from the USDA.

Gains overnight in Malaysian palm oil and European rapeseed futures helped to spur some of the early buying that surfaced in canola, brokers said.

The advances posted in CBOT soybean and soyoil values helped to push canola upwards as did continued tightness in the cash market.

The buying back of short positions by locals fueled some of the gains in canola as did news that the European Commission has lifted the ban on the import of a variety of genetically modified canola produced in Canada. Traders indicated that the lifting of the ban will translate into Canadian canola being exported to the European Union for both food and industrial usage, particularly the biodiesel sector.

Steady domestic crusher demand helped to underpin canola.

Profit-taking limited the upside price potential as did indications that commercials have finished covering recent canola export business to China, brokers said.

Firmness in the Canadian dollar during the session also helped to temper some of the upward price potential.

There were an estimated 6,431 canola contracts traded during Tuesday’s session, up from 4,771 during the previous session. Of the contracts traded Tuesday, 2,932 were spread related.

Western barley futures were unchanged to lower in extremely light activity. The gains in CBOT corn were supportive but the lack of fresh demand was an undermining price influence, traders said. Commercials were the featured participants on both sides of the thin volume total.

An estimated 2 barley contracts changed hands during the session. On Monday, 31 barley contracts were traded.