ICE Canada Review: Canola climbs on domestic demand
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| December 16, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session higher with the gains a reflection of strong domestic crusher demand and a drop off in farmer deliveries into the cash pipeline, market watchers said.
Spreading of the January/March contracts was once again a big feature in canola and helped to bolster the volume total. Canola contracts found good support from favourable crush margins and the need of domestic processors to buy canola away from the export market, traders said. The pricing of old export business to Japan and Mexico also helped to generate support for canola. The advances in canola also came in response to a downswing in the value of the Canadian dollar and some light chart based buying by a variety of market players, brokers said. A snow-storm in Alberta was believed to have prevented producers from being aggressive sellers of canola to the country elevator system, brokers said. The upside in canola was limited by end of year liquidation orders from speculative fund accounts. The lack of fresh export business that was being put on the books, also sparked some light selling in canola and tempered the upward price action. Weakness in nearby CBOT soybean and soyoil contracts further restricted the price advances in canola. There were an estimated 23,804 canola contracts traded Thursday, down from the 26,124 contracts that changed hands during the previous session. Of the contracts traded Thursday, 19,574 were spread related. Western barley futures were unchanged and untraded Thursday. On Wednesday, no western barley contracts changed hands.
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