ICE Canada Grain/Oilseed Review: Good Demand Lifts Canola
| 2 min read
| By Dwayne Klassen, Resource News International |
| May 14, 2009 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished the session mainly higher with much of the upward price action coming on the heels of strong demand from both the domestic and export sectors, market watchers said. Fresh speculative interest along with the surfacing of commodity fund buy-orders helped to push canola values up.
The demand from the domestic processors continued to be related to the profitable crush margins, with the pace of processing in 2008/09 on track to set a new annual record, brokers said. Some of the commercial demand in canola Thursday was said to be covering fresh export business with China, although exporters were unable to confirm any new sales, traders said. Demand for canola from elevator companies has also been strong in order to sustain an aggressive export pace from Canada’s West Coast, brokers said, noting that this in turn has helped to generate support in the commodity. There were ideas that the carry over level of canola from the 2008/09 level will be a lot less than originally anticipated due to the strong demand pace and was believed to have sparked some of the fresh speculative buying, brokers said. Strength in canola also came from the slow pace of farmer deliveries into the cash market and concerns about the cold, dry, and wet conditions in parts of western Canada that were slowing down seeding operations. Advances in CBOT soybeans also spilled over to lend some minor support as did bullish chart signals. The upside was limited by profit-taking and firmness in the Canadian dollar. Weakness in CBOT soyoil values also helped to trim some of the gains seen in canola. There were an estimated 13,876 canola contracts traded during Thursday’s session, up from 9,904 during the previous session. Western barley futures were unchanged to higher at the close. Activity was described as choppy and was a light two way affair between commercials, brokers said. Weakness in barley during the day was tied to sentiment that any delays in seeding canola in western Canada will translate into increased barley area due to its short-season growing ability, brokers said. They noted that with stocks of barley already burdensome this would only add to the supply situation. Late day gains in CBOT corn futures provided some underlying support for barley, traders said. An estimated 3 barley contracts changed hands during the session. On Wednesday, 122 barley contracts were traded.
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