ICE Canada Review: Weak C$ Underpins Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 4, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Tuesday’s session narrowly mixed although the nearby contracts did post advances. Much of the upward price momentum was encouraged by the pull-back in the value of the Canadian dollar, market watchers said.
The downswing in the value of the Canadian dollar helped to stimulate fresh demand from domestic processors as well as encouraged commercials to price old export business to Japan, traders said. Activity was on the lighter side although spreading did help to augment the volume total. Some position evening ahead of the grain stocks in all positions report scheduled to be released by Statistics Canada on May 10, was a minor feature of the activity. The buying back of previously sold positions by commodity fund accounts helped to generate some of the price advances seen in canola, brokers said. The upside in canola was limited by the losses seen in CBOT soyoil and by the improved growing conditions in western Canada due to the arrival of much needed precipitation. Light, but steady hedge selling by grain companies also restricted the price gains as did the record area that will be planted to canola in western Canada, traders said. Profit-taking by a variety of market players was also evident and also helped to limit the gains in canola. Early weakness in canola had come from the losses posted by Malaysian palm oil and European rapeseed futures overnight. There were an estimated 5,377 canola contracts traded Tuesday, down from 7,212 during the previous session. Of the contracts traded, 1,606 consisted of spreads. Western barley futures were untraded and unchanged Tuesday. No barley contracts changed hands during the session. On Monday, no barley contracts were traded. |
