ICE Canada Review: Canola drops on weak demand
| 1 min read
| By Dwayne Klassen, Resource News International |
| August 12, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session mainly lower after bouncing between gains and losses throughout the session as market participants tried to define a clear price trend, industry watchers said. Activity was described as light and choppy.
Much of the selling that surfaced in canola during the day was associated with the absence of fresh export demand and the improved prospects for the crop in western Canada in view of more favourable growing conditions, brokers said. Market participants were now working with an 11.0 million metric ton canola output estimate, up significantly from the 9.0 million tons when the crop was thought to have suffered yield damage. Declines overnight in Malaysian palm oil influenced some selling of canola during the day as did the sell-off seen in CBOT soyoil futures. Steady elevator company hedge selling due to panicked farmer deliveries also was an undermining price influence. The advancing harvest operations in western Canada also prompted some selling interest, brokers said. A minor upswing in the value of the Canadian dollar Thursday was also viewed as an undermining price influence. The record large USDA projection for US soybean production also added to the bearish price sentiment in canola, analysts said. Canola futures found some support during the session from small domestic crusher demand and the pricing of old export business, traders said. The buying back of previously sold positions was also evident and helped to limit the price weakness. There were an estimated 9,869 canola contracts traded Thursday, down from the 19,939 contracts that changed hands during the previous session. Western barley futures were unchanged with no contracts changing hands on Thursday. On Wednesday, no barley contracts were traded. |
