ICE Canada Review: Canola Weakens On Poor Demand
| 2 min read
| By Dwayne Klassen, Resource News International |
| February 25, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session on the defensive with a drop off in demand and the losses displayed by the CBOT soybean complex generating the downward price momentum, market watchers said.
The drop in demand came from both the export and domestic sectors, with buyers for both outlets stepping to the sidelines to see how far canola values would fall before stepping back into the market to pick up supplies, traders said. Canola contracts were lower early in the session by the declines seen in the outside markets, including global crude oil futures, brokers said. The bearish price sentiment in canola was also tied to speculative liquidation, sparked by weak chart signals. The large world oilseed supply situation and the pending harvest of a record sized soybean crop in Argentina and Brazil also continued to prompt selling in canola, brokers said. Some end-of-month hedging by elevator companies was also evident during the session. The pull-back in the value of the Canadian dollar was seen as an underpinning price influence in canola. Some scale-down pricing by commercials helped to restrict the price weakness seen in canola. The covering of short positions by market participants also was evident and further tempered the price declines in canola, brokers said. There were an estimated 11,425 canola contracts traded Thursday, down from 13,660 during the previous session. Of the contracts traded, 5,262 contracts were spread related. Western barley futures were lower with steady commercial selling in the absence of willing buyers, letting prices slide downwards. The sell-off in CBOT corn futures and a drop off in end-user demand helped to weigh on barley values, brokers said. There were 20 barley contracts that changed hands during the session. On Wednesday, 78 barley contracts were traded. |
