ICE Canada Review: Oversold Sentiment Buoys Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 12, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session higher, with much of the upward price momentum linked to sentiment that the move to new contract lows on Tuesday was overdone and that an upward correction was needed, market watchers said.
Adding to the support in canola was the surfacing of fresh demand, which was tied to the lows seen on Tuesday. Some of the demand came from commercials, with some of the activity believed to be the pricing of old business to Japan, traders said. However, there were also indications that some new Canadian canola sales have been put on the books, which added to the strength. Export sources, were unable to confirm any fresh business. The buying back of previously sold positions helped to generate the gains in canola as did a drop off in farmer sales into the cash pipeline. Gains in CBOT soyoil futures were also an underpinning price influence. The upside in canola was restricted by the losses seen in CBOT soybean values and by the improved growing conditions across much of western Canada. The return of warm temperatures across the Canadian prairies also weighed on canola as the readings were expected to help dry out fields for seeding operations. There were an estimated 10,341 canola contracts traded Wednesday, up from 9,577 during the previous session. Of the contracts traded, 2,800 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. |
