ICE Canada Review: Exports, Weak C$ Bolster Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| January 22, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Friday’s session with advances as steady commercial and speculative demand helped to generate the upward price movement, market watchers said.
Position evening ahead of the weekend was a feature of the activity. Some of the commercial interest was said to be covering both old and new export business as well as some domestic processor requirements, brokers said. The pull-back in the value of the Canadian dollar also influenced some demand, given that the weak currency makes canola more attractive to buyers. The speculative interest in the market was said to be the covering of short-positions. Sentiment that canola was oversold and in need of an upward correction also helped to underpin prices, traders said. The lack of farmer deliveries into the cash pipeline helped to underpin canola with some of the elevator companies in Alberta having to tighten basis levels in order to entice some movement, brokers said. The upside in canola was limited by the losses seen in CBOT soybean and soyoil futures and the large global oilseed supply situation. Spreading was a feature of the activity and helped to augment the volume total in canola. There were an estimated 15,359 canola contracts traded Friday, up from 9,404 during the previous session. Of the contracts traded, 8,370 were spread related. Western barley futures were steady to lower with the weakness in CBOT corn futures and reduced end-user demand behind the declines, brokers said. It only took a small amount of commercial offerings to push prices down in the absence of willing buyers. An estimated 78 barley contracts changed hands during the session. On Thursday, 115 barley contracts were traded. |
