ICE Canada Review: Overbought ideas undermine canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| October 21, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session on the defensive with some of the downward price action encouraged by sentiment that values were due for a correction after recent sharp advances, market watchers said.
The price weakness in canola was also associated with profit-taking by local and speculative accounts. Some of that selling interest was also spurred on by the declines experienced by CBOT soybean and soyoil futures, brokers said. Elevator company hedge selling also surfaced during the session and contributed to the bearish price atmosphere. Traders also linked the weakness in canola to reports that yields for the commodity were coming in much better than anticipated. Some early strength in canola had stemmed from the advances posted overnight in Malaysian palm oil and European rapeseed futures. Steady levels of domestic crusher demand and indications that some fresh additional canola export business was close to being concluded with China helped to keep a firm floor under values, brokers said. The pricing of old export business to Japan helped to trim some of the price weakness as did a downturn in the value of the Canadian dollar, traders said. Good volume totals were evident in canola, with spreading a feature of that activity. There were an estimated 24,806 canola contracts traded Thursday, down from the 25,439 contracts that changed hands during the previous session. Western barley futures were unchanged and untraded Thursday. On Wednesday no western barley contracts were traded.
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