ICE Canada Review: Short-covering Lifts Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| March 24, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Wednesday’s session mainly higher with the buying back of previously sold positions by a variety of market participants behind the late day advances, industry watchers said.
Canola had traded at mainly lower levels for the bulk of the day in response to the sell-off experienced in the CBOT soybean complex and the bearish global oilseed supply situation. Some of the early selling in canola was inspired by the declines posted by Malaysian palm oil futures overnight. Liquidation orders in canola came from a variety of market participants with the declines in CBOT soybeans and soyoil generating that interest, brokers said. Chart based speculative selling was also evident during the session and helped to undermine values. The record large soybean supplies that are now available in Brazil and Argentina contributed to the bearish price atmosphere in canola as did sentiment that western Canadian producers intend on bolstering area to the crop significantly this spring, brokers said. Helping to bolster canola futures during the day was steady commercial demand, with much of that interest said to be covering domestic processor requirements as well as routine export business to Japan and Mexico, traders said. The pull-back in the value of the Canadian dollar was also an underpinning price influence for canola. There were an estimated 10,469 canola contracts traded Wednesday, up slightly from 10,313 during the previous session. Of the contracts traded, 3,858 contracts were spread related. Western barley futures were little changed in non-existent activity. There were no barley contracts that changed hands during the session. On Tuesday, no barley contracts were traded.
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