ICE Canada Review: Hedges, Strong C$ Undermine Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 11, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session on the defensive with losses influenced by a pick up in elevator company hedge selling and the renewed strength of the Canadian dollar, market watchers said.
Some of the activity in canola continued to see commodity funds rolling contracts out of the nearby March future and into May. Canola was mainly lower with losses tied to an increase in elevator company hedge offers as producers begin to price storage tickets, traders said. A drop off in domestic processor demand helped to undermine values as did the weakness displayed by CBOT soyoil futures, brokers said. A drop off in fresh export demand also sparked some of the downward price action in canola. Canola had been propped up earlier in the week by reports of fresh business with China. Exporters confirmed that China picked up at least a couple of cargoes of Canadian canola for July shipment earlier this week. Chart related selling was also a bearish price influence. Some underlying support in canola came from scale down commercial demand and the advances seen in CBOT soybean futures. Gains overnight in Malaysian palm oil and European rapeseed had lent canola some early support, traders said. There were an estimated 13,803 canola contracts traded Thursday, down from 14,021 during the previous session. Of the contracts traded, 8,352 were spread related. Western barley futures were mixed with the nearby March contract down and the remainder higher. Only the two nearby months actually saw some volume. Commercials were the featured players with the action consisting of spreading, brokers said. There were 77 barley contracts that changed hands during the session. On Wednesday, no barley contracts were traded. |
