ICE Canada Grain/Oilseed Review: Soyoil gains lift canola

Dwayne Klassen, Resource News International

March 20, 2009

Winnipeg – Canola contracts on the ICE Futures Canada platform finished the day mainly higher with much of the strength associated with the advances seen in CBOT soyoil values, market watchers said. Short-covering ahead of the weekend also helped to prop up canola.

Losses in the North American stock market and global crude oil meanwhile, tempered some of the upward price momentum seen in canola. Position evening ahead of the weekend was a feature of the activity.

There was a lack of fresh fundamental inputs with mixed signals from the outside markets resulting in values moving between gains and losses numerous times during the session.

Some of the early downward price action seen in canola came from elevator and commercial hedge selling as well as to some profit-taking following Thursday’s rally, traders said. The large canola crop prospects heading into 2009/10 also was an undermining price influence.

A drop off in fresh export demand also sparked some weakness in canola.

Support in canola, meanwhile, came from steady domestic crusher demand and the pricing of routine export business. A pull-back in the value of the Canadian dollar late on Friday also helped to encourage some support.

There were an estimated 10,063 canola contracts traded during Friday’s session, down from 16,804 during the previous session. Of the contracts traded Friday, 3,318 were spread related.

Western barley futures were fractionally weaker in extremely quiet trade. Light commercial offers in the absence of willing buyers allowed the nearby May and July contracts to be pushed down, brokers said.

An estimated 68 barley contracts changed hands during the session. On Thursday, 100 barley contracts were traded. Of the contracts traded on Friday, 60 were spread related.

Settlement prices are in Canadian dollars per tonne.