ICE Canada Review: Short-covering Bolsters Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| June 8, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session with good advances with gains linked to the covering of previously sold positions and to continued concerns about the wet conditions and its impact on the seeding and development of the canola crop in western Canada, market watchers said.
Good volumes were seen in canola with the rolling of positions from the nearby July future into the November contract by a variety of market participants a feature of the activity, brokers said. Canola contracts were pushed upwards throughout the session by the covering of short positions by a variety of market players with the triggering of buy-stop orders on the way up helping to amplify the price advances, traders said. The worries about unseeded canola area due to the wet conditions also continued to stimulate strong buying interest, brokers said. There were reports that up to 3 million acres of prime canola land in Saskatchewan was to wet to seed canola. Weather outlooks calling for additional precipitation across the Canadian grainbelt right through the weekend also augmented the concerns regarding the planting and development of the canola crop, traders said. Steady domestic crusher demand and the pricing of old export business to Japan helped to underpin canola values. The absence of farmer deliveries into the cash pipeline added to the firm price tone seen in canola. Some selling in canola was inspired by the losses seen in CBOT soybean futures. Profit-taking was also an undermining price influence. There were an estimated 37,080 canola contracts traded Tuesday, up from 20,996 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. |
