ICE Canada Review: Canola Drops As Output Rises
| 1 min read
| By Dwayne Klassen, Resource News International |
| August 11, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session with declines. Weakness in canola reflected the improved crop prospects in western Canada and the subsequent increase in production estimates, market watchers said.
The evening up of positions ahead of the USDA supply/demand report scheduled for release early Thursday was a feature of the activity. Canola contracts traded at mainly lower levels for a good portion of the day with the losses tied to sentiment that recent good weather conditions have increased the size of the Canadian canola crop. Based on early harvest results, market participants players were now using a Canadian canola production target of around 11 million metric tons compared with earlier ideas of only 9 million, brokers said. Early weakness in canola came from the total lack of commercial demand from both the domestic and export sectors, traders said. Some chart based liquidation orders were also evident in canola and helped to undermine values. Some sell-stops were triggered on the day down and amplified the losses in select contracts, brokers said. Early losses in both CBOT soybeans and soyoil added to the bearish price sentiment seen in canola, although a late upswing in soyoil futures helped to take canola futures off their lows of the day. The buying back of short positions also provided some minor support. Spreading was a feature of the activity in canola and helped to augment the volume total. There were an estimated 19,939 canola contracts traded Wednesday, up from the 10,347 contracts that changed hands during the previous session. Western barley futures were unchanged with no contracts changing hands on Wednesday. On Tuesday, no barley contracts were traded. |
