ICE Canada Review: Short-Covering, CBOT Gains Lift Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 2, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform ended Tuesday’s session with good gains with some of the upward price movement linked to sentiment that values were due for an upward correction after recent declines, market watchers said. Strength in CBOT soybean and soyoil values contributed to the upward price momentum seen in canola.
Early support in canola had come from light follow-through buying from the late rally seen on Monday and from the gains seen in Malaysian palm oil and European rapeseed futures overnight, brokers said. Adding to the support in canola was the absence of farmer selling and light routine pricing of old export business to Mexico and Japan. Support in canola also came from the buying back of previously sold positions by speculative accounts. The rally in canola was described as a "dead cat bounce" by a couple of traders, who felt that values are still destined to move lower given the large domestic canola stocks and the huge worldwide soybean supply situation. Statistics Canada on Friday will release an updated grain and oilseed stocks in all positions report. A good portion of the activity seen in canola was said to be spread related, with the large index funds rolling out of the March canola contract into the May future, brokers said. There were an estimated 17,484 canola contracts traded Tuesday, up from 12,691 during the previous session. Of the contracts traded, 13,466 were spread related. Western barley futures were steady to slightly firmer at the close, with the gains in CBOT corn futures providing some underlying support, brokers said. Activity was a light affair between commercials. An estimated 80 barley contracts changed hands during the session. On Monday, 100 barley contracts were traded. |
