ICE Canada Review: Late Commercial Demand Lifts Canola
| 2 min read
| By Dwayne Klassen, Resource News International |
| February 1, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Monday’s session with small gains with last minute commercial buy-orders hitting the market and turning values upwards, market watchers said. Canola had been on the defensive throughout the session with the strong Canadian dollar prompting some of the selling.
Buying interest in canola had been extremely thin for most of the day, allowing light sell-orders that hit canola to push prices down. The absence of fresh export demand and only limited demand from domestic processors had also weighed on values, traders said. Light chart-based speculative liquidation had also been evident and had further undermine canola futures. There were also reports that commodity funds had been adding to their already large short positions, which had also put canola on the defensive, brokers said. The large global oilseed supply situation, with a record soybean crop ready to be harvested in both Brazil and Argentina, adding to the bearish price sentiment in canola. Some underlying support in canola had come from the absence of farmer deliveries into the cash pipeline and from sentiment that values were oversold and in need of an upward correction. Strength in CBOT soyoil contracts also spilled over to generate some support in canola, brokers said. There were an estimated 12,691 canola contracts traded Monday, down from 12,896 during the previous session. Of the contracts traded, 7,578 were spread related. Western barley futures were steady to lower with a drop off in end-user demand behind some of the price weakness, traders said. They noted that it only took a small amount of commercial offers to push barley values down in the absence of willing buyers. An estimated 100 barley contracts changed hands during the session. On Friday, 60 barley contracts were traded. Of the contracts traded Monday, 50 were spread related. |
