ICE Canada Review: Canola Retreats on Year-End Liquidation

A number of locals, commission houses, fund accounts, and even commercials were seen taking profits ahead of year end in the last full day of trading, brokers said. The ICE Futures Canada trading platform will be closing roughly an hour earlier than normal on Friday, December 31, 2010, and will remain closed on Monday, January 3, 2011 in a delay to the New Year’s Holiday.

The thinness of the volume due to the holiday atmosphere, helped to amplify price movement in canola during the session.

Firmness in the Canadian dollar was an undermining price influence in canola, particularly as the unit continued to trade at even money with the US currency most of Thursday.

A drop off in export demand for Canadian canola contributed to some of the price weakness seen in canola.

CBOT soybean and soyoil values had exhibited some weakness during the session, which spilled over to spark some selling in canola, brokers said.

Some underlying demand in canola came from steady domestic crusher demand and from the pricing of old export business.

A slow down in the level of hedges that were hitting canola futures from line companies, also restricted the price weakness, traders said.

The unloading of January contracts and moving into the March future through the use of spread trades, provided much of the volume total seen in canola Thursday.

There were an estimated 7,733 canola contracts traded Thursday, down from the 11,752 contracts that changed hands during the previous session.

Western barley futures were unchanged and untraded Thursday. On Wednesday, no western barley contracts changed hands.