ICE Canada Review: Strong C$ Undermines Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| January 14, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished the session with significant declines with much of the downward price slide linked to the strong Canadian dollar and to the losses experienced by CBOT soybean and soyoil values, market watchers said.
Canola values had started the day on the defensive in reaction to the strength displayed by the Canadian currency and the continued absence of fresh export demand for the commodity, traders said. Chart related liquidation orders by a variety of market participants also contributed to the price weakness in canola. The price declines seen by canola were expanded when the losses in CBOT soybeans turned into double digits, brokers said. The price weakness in canola was also attributed to the record supply of soybeans in the US and in South America, traders said. Some scale-down commercial buying, believed to be covering old Japanese business, helped to slow the price drop seen in canola. Light domestic crusher demand at the lows also was an underpinning price influence. Spreading was a feature of the activity and helped to augment the volume total. There were an estimated 14,372 canola contracts traded during Thursday’s trade, up from 9,591 during the previous session. Of the contracts traded, 6,152 were spread related. Western barley futures closed steady to lower with a drop off in end-user demand and the weakness in CBOT corn futures behind the downward price slide, traders said. Activity was a light two sided commercial affair. An estimated 129 barley contract changed hands during the session. On Wednesday, 11 barley contracts were traded. Of the contracts traded Thursday, 76 were spread related. |
