ICE Canada Review: Canola drops as US soyoil flounders
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| November 16, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session with significant declines. Losses in the outside oilseed markets weighed heavily on canola values with the declines augmented by chart related liquidation by speculative and local accounts, market watchers said.
Activity in canola was described by market participants as extremely volatile. Canola contracts were pushed lower early by the losses seen overnight in Malaysian palm oil and European rapeseed futures. The limit down price drop in CBOT soyoil contracts helped to undermine canola futures as did the sharp losses seen in CBOT soybeans, brokers said. The unloading of positions by local and speculative accounts helped to amplify the downward price slide seen in canola, with much of that selling tied to bearish chart signals. A pick up in elevator company hedge selling was evident and further undermined canola contracts. Weakness in canola was also tied to the backing away from the market by domestic processors, especially with crush margins losing value, traders said. Commercials were scale down buyers and that helped to slow the downward price action seen in canola. Some of that buying was believed to be covering old export business. The down swing in the value of the Canadian dollar also slowed the price weakness seen in canola. There were an estimated 19,582 canola contracts traded Tuesday, up from the 13,994 contracts that changed hands during the previous session. Of the contracts traded, 4,836 were spread related. Western barley futures were unchanged and untraded Tuesday. No western barley contracts traded on Monday.
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