ICE Canada Review: Overbought Ideas Undermine Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| June 17, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session mostly on the defensive as profit-taking and sentiment that values were in need of a downward correction after recent strong gains, pushed values to lower ground, market watchers said.
The declines in canola were limited by ongoing weather related crop production concerns, brokers said. Canola contracts had traded at lower levels for a good portion of the day in reaction to profit-taking and to the overbought market conditions, traders said. A drop off in domestic crusher demand helped to fuel some of the selling interest with the lack of fresh export demand being put on the books adding to the price weakness, traders said. The losses experienced by CBOT soybean and soyoil values also weighed on canola futures. The slow pace of farmer selling provided some underlying support for canola futures as did the ongoing weather uncertainty surrounding Canada’s canola production outlook, brokers said. The pull-back in the value of the Canadian dollar also was an underpinning price influence. The rolling out of positions out of the July canola future and into the November contract was again a big part of the activity and helped to augment the volume total, brokers said. There were an estimated 25,273 canola contracts traded Thursday, down from the 34,893 contracts during the previous session. Of the contracts traded, 15,210 consisted of spreads. Western barley futures were steady to slightly higher in very choppy activity. The realigning of spreads by commercial accounts helped to stimulate some of the price activity. A light pick up in end-user demand was also an underpinning price influence for barley, brokers said. On Thursday, 25 barley contracts were traded. On Wednesday, no barley contracts changed hands. |
