ICE Canada Review: Canola Drops On Strong C$
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 10, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Monday’s session on the defensive with much of the downward price slide associated with the renewed upswing in the value of the Canadian dollar, market watchers said.
Activity was described as volatile with spreading accounting for some of the volume total. The grain and oilseed stocks in all positions report released early Monday by Statistics Canada had little overall impact on the direction of canola futures. Canola contracts posted modest losses in view of the strong Canadian dollar and the resulting drop off in demand from the domestic crushing sector and from exporters, traders said. Weakness in canola also was tied to the triggering of sell-stop orders on the way down, which only served to amplify the price drop, brokers said. The thinness of the volume totals early in the day, also augmented the downward price slide. Weakness in canola was also tied to the improved soil moisture situation in western Canada and the weather outlooks calling for warmer temperatures which were seen aiding both planting and development of crops, traders said. Light, but steady elevator company hedge selling was also an undermining price influence. Some of the selling that surfaced in canola was also motivated by the weakness seen in CBOT soyoil, brokers said. Underlying support in canola came from scale down buying by commercials. The need to keep a weather premium in the canola market also provided some underlying support. There were an estimated 14,786 canola contracts traded Monday, up from 11,310 during the previous session. Of the contracts traded, 6,642 consisted of spreads. Western barley futures were untraded and unchanged Monday. No barley contracts changed hands during the session. On Friday, no barley contracts were traded. |
