ICE Canada Review: Canola Drops On CBOT Losses
| 2 min read
| By Dwayne Klassen, Resource News International |
| March 9, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session mainly lower after trading mixed for the bulk of the day. Weakness in CBOT soybean and soyoil futures and the absence of follow-through buying allowed most canola contracts to move down by the close, market watchers said.
Position evening ahead of updated supply/demand balance tables from the USDA on Wednesday was a feature of the activity. The nearby May and July canola contracts had found support from commercial spreading of new export business, brokers said. They noted that the spreading was linked to new purchases of Canadian canola by Pakistan. Pakistan and China were both said to have purchased Canadian canola earlier in the week for an unspecified delivery date. Light domestic processor demand helped to generate some support as did the buying back of previously sold positions, traders said. Some light chart-based speculative buying had also provided some of the early strength in the nearby canola contracts. The lack of follow through demand and the losses in CBOT soybeans and soyoil allowed canola futures to turn mainly lower near the close, traders said. Strength in the Canadian dollar was an undermining price influence as was steady hedge selling by grain companies. Losses overnight in Malaysian palm oil futures also added to the bearish price sentiment in canola, brokers said. There were an estimated 16,345 canola contracts traded Tuesday, up from 4,354 during the previous session. Of the contracts traded, 10,044 contracts were spread related. Western barley futures were little changed with very few market players wanting to take on a position in the absence of fresh fundamental inputs and the lack of open interest, traders said. There were no barley contracts that changed hands during the session. On Monday, 45 barley contracts were traded. |
