ICE Canada Morning Comment: Canola on this rise again
Short covering adding to upswing
By Glen Hallick
Glacier Farm Media MarketsFarm – Canola futures on the Intercontinental Exchange continued upward on Thursday morning, adding on to yesterday’s gains.
Short covering by the speculative funds aided the upswing into a second day.
Support for canola also came from upticks in Chicago soybeans and soymeal, as well as European rapeseed and Malaysian palm oil. Meanwhile, Chicago soyoil was relatively steady. Crude oil was higher with spillover going into the oilseeds.
More bearish pressure on canola came from its November contract holding well below its major moving averages. Crush margins pulled back with the November positions slipping to C$98 to C$103 per tonne above the futures.
Rain was forecast to fall on Thursday at either end of the Prairies while temperatures were in the low to mid 20 degrees Celsius.
The likelihood of grain movement by rail grinding to a halt this time next week remained in the background. Negotiations between Canada’s two largest railways and the union representing about 9,300 workers haven’t made any progress. Already the railways have curtailed the movement of some goods ahead of a work stoppage.
The Canadian dollar stepped back on Thursday morning with the loonie at 72.87 U.S. cents compared to Wednesday’s close of 72.93.
Approximately 7,000 contracts had traded by 8:38 CDT and prices in Canadian dollars per metric tonne were:
Price Change Canola Nov 583.80 up 5.50 Jan 594.60 up 6.00 Mar 603.20 up 6.30 May 608.80 up 6.70
