ICE Canada Review: Fund Selling Undermines Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 26, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session on the defensive with steady sell orders from commodity funds behind the downward price slide, market watchers said. Firmness in the Canadian dollar was also an undermining price influence.
Canola contracts traded at lower levels for much of the day with steady selling by fund accounts behind the downward price slide. Some of the selling was influenced by the good crop prospects in western Canada for canola as well as to sentiment that the arrival of timely precipitation resulted in the area planted to canola rising well above the record projections that had already been made, brokers said. Private industry estimates have canola area in western Canada topping the 18.0 million acre level, up considerably from earlier projections of a record 17.2 million to 17.5 million acres, brokers said. The absence of fresh export demand and the prospect of large global oilseed supplies contributed to the downward price action experienced by canola during the day. Some minor support in canola came from scale down domestic crusher demand and the pricing of old export business to Japan by commercials, traders said. Strength in CBOT soybeans and soyoil futures were supportive as were the lack of hedge offers from grain companies, brokers said. Spreading was a feature of the activity in canola and helped to augment the volume total. There were an estimated 10,803 canola contracts traded Wednesday, down from 16,219 during the previous session. Of the contracts traded, 6,334 consisted of spreads. Western barley futures were untraded and unchanged Wednesday. No barley contracts changed hands during the session. On Tuesday, no barley contracts were traded. |
