ICE Canada Review: Poor Demand/Hedging Undermines Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| June 1, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session on the defensive with a demand drop off and a pick up in the level of hedges from grain companies generating much of the downward price slide, market watchers said.
Spreading was a key feature of the activity seen in canola with the large index funds liquidating their July canola futures for positions in the November contract, brokers said. Canola contracts traded at mainly lower levels for most of the day with the losses tied to steady hedge selling by grain companies and the absence of fresh export business being put on the books. Weakness in CBOT soybeans and the large global oilseed supply situation helped to weigh on prices. There were conflicting reports regarding canola planting delays and damage from recent heavy precipitation and snowfall, brokers said. Some market players felt that seeding of the canola crop will be seriously delayed and that flooding in some areas will have severely damaged yield output. However, there were other participants who felt that there was still plenty of time to seed canola and that most canola crops will recover from the heavy precipitation levels. The small pull-back in the value of the Canadian dollar was also an underpinning price influence. There were an estimated 17,856 canola contracts traded Tuesday, up significantly from 978 during the previous session. Western barley futures were untraded and unchanged Tuesday. No barley contracts changed hands during the session. On Monday, no barley contracts were traded. |
