ICE Canada Review: Soybean Losses Limit Canola Gains
| 2 min read
| By Dwayne Klassen, Resource News International |
| March 23, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session mainly higher with only the two nearby months suffering any sort of price setback. Gains for much of the session were encouraged by the buying back of previously sold positions by a variety of participants, market watchers said.
Early strength in canola came from the advances posted in Malaysian palm oil futures overnight as well as from steady demand from commercials during the session, brokers said. Much of the commercial interest was said to be covering good demand from domestic processors as well as routine export business to Mexico and Japan, traders said. However, there was also speculation about new export demand for Canadian canola, which helped to keep a firm floor under the commodity. The implementation of spring road restrictions also contributed some strength, with producers less likely to move canola up the drive ways of the grain companies during this time period, brokers said. The two nearby canola contracts were unable to sustain the gains earned earlier in the session, especially with the sell-off experienced by CBOT soybean and soyoil values, brokers said. Weakness in canola was also associated with the record large soybean supplies now available in Brazil and Argentina. The prospects of a jump in canola area this spring in western Canada also limited some of the upside price potential in the commodity, traders said. Firmness in the Canadian dollar was also a restrictive price influence. There were an estimated 10,313 canola contracts traded Tuesday, down from 10,493 during the previous session. Of the contracts traded, 5,578 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 Monday, no barley contracts were traded.
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