ICE Canada Review: Weather concerns lift canola
| 2 min read
| By Dwayne Klassen, Resource News International |
| June 10, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished Thursday’s session with good gains. Ongoing worries about the impact wet conditions have had on canola acreage and development across western Canada stimulated much of the upward price action seen in the commodity, market watchers said.
Sentiment that a large portion of the intended area that was to be seeded to canola, particularly in Saskatchewan, will go unplanted this spring, helped to fuel good levels of speculative buying, brokers said. The weather concerns also centered around how much area that was seeded to canola has been flooded out because of the excess moisture. The potential for canola fields to suffer additional damage due to more rain in the weather forecast also underpinned prices. Steady demand from commercial accounts also generated some of the strength seen in canola. The commercial interest was said to be covering domestic crusher needs as well as covering old export business to Japan, traders said. The upward price action also resulted in market participants having to buy back previously sold positions. Strength in canola was also related to chart-related demand, with a number of contracts pushing through technical resistance levels, brokers said. The upside in canola was limited by the weakness displayed by CBOT soybean futures and by the strong Canadian dollar which continued to scare off fresh export demand. A pick up in farmer deliveries into the cash pipeline also limited the upside seen in canola, brokers said. Good volume totals were again seen in canola with the rolling of positions out of the nearby July future and into the November contract by a variety of market participants associated with the activity. There were an estimated 27,692 canola contracts traded Thursday, up from the record 49,015 contracts during the previous session. Western barley futures were unchanged Thursday, although 10 barley contracts changed hands during the session. On Wednesday, no barley contracts were traded.
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