ICE Canada Review: Profit-taking Undermines Canola
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| February 3, 2011 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session mainly on the defensive with profit-taking and the unloading of positions ahead of Friday’s grain stocks report scheduled to be released by Statistics Canada tied to the downward price slide, market watchers said.
New contract highs were established early in the session amid followthrough buying from Wednesday’s firm close and in view of the gains seen overnight in European rapeseed futures, brokers said. Early strength in CBOT soybean and soyoil values had also encouraged some of the initial price strength in canola. The early advances in canola were also linked to steady domestic crusher demand and the pricing of routine export business to Japan by commercial accounts. However, as the day moved on, that demand began to ease, allowing the sell-orders in canola to take center stage and push prices into negative territory, traders said. Most of the selling came from speculative accounts, but local and commission house liquidation was also evident. The downturn in CBOT and soyoil futures also weighed on canola, as did a pick up in hedge selling by grain companies near the close, brokers said. Some of the selling that surfaced near the close was also believed to be technical in nature, especially with resistance levels holding, traders said. Spreading was a minor feature of the activity in canola, but still helped to bolster the volume total. There were an estimated 15,865 canola contracts traded Thursday, up fractionally from the 15,781 contracts that changed hands during the previous session. Of the contracts traded, 8,502 were spread related. Western barley futures were unchanged and untraded Thursday. On Wednesday, no western barley contracts changed hands.
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