ICE Canada Review: Canola Drops in Spread Dominated Trade
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 17, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session on the defensive with overbought price sentiment and the declines in the CBOT soybean complex encouraging much of the downward price action, market watchers said.
Strong volume totals were seen in canola with much of that activity consisting of spreading as market participants rolled out of the nearby March future and into the May contract, brokers said. Canola values moved lower undermined by sentiment that the gains seen on Tuesday were overdone and that a downward correction was needed. The losses in CBOT soybean and soyoil values also spilled over to weigh on canola futures. The large global oilseed supply situation, with both Brazil and Argentina set to harvest a record large soybean crop, helped to push canola values down, traders said. Concerns about the large canola supply in western Canada also prompted some selling interest. Some light hedge selling by elevator companies and a drop off in fresh export demand helped to spark some of the downward price slide, brokers said. Routine pricing of old export business and some light domestic crusher demand provided minor support to values. A pull-back in the value of the Canadian dollar also provided some underlying support. There were an estimated 32,686 canola contracts traded Wednesday, up from 14,742 during the previous session. Of the contracts traded, 27,694 were spread related. Western barley futures were little changed to fractionally higher on the day although the nearby March future was the only contract to change hands. Most of the action was conducted by commercials, brokers said. There were 45 barley contracts that changed hands during the session. On Tuesday, 108 barley contracts were traded. |
