ICE Canada Review: Weather Concerns Underpin Canola
| 2 min read
| By Dwayne Klassen, Resource News International |
| June 23, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished mostly higher Wednesday with much of the upward price momentum encouraged by ongoing weather concerns in western Canada, market watchers said.
Wednesday morning’s acreage survey update from Statistics Canada was largely ignored by the trade as the numbers did not take into account the heavy rainfall that prevented producers from finishing their seeding operations. However, the numbers did provide a base in which market players were able to begin taking into account the wet weather damage. Unseeded area, flooded out fields, and lower yield potential for canola across western Canada from excessive rainfall continued to keep a weather premium in the market, brokers said. Concerns about extremely dry growing conditions in the northern areas of Alberta, which is a prime canola producing region, also influenced some of the strength seen in the commodity. The pull-back in the value of the Canadian dollar helped to underpin canola futures as did renewed domestic crusher demand. The pricing of old export business to Japan by commercials helped to provide some support as did steady buying interest from commodity fund accounts. Some chart related buying also surfaced during the day, helping to underpin values. The upside in canola was limited by a pick up in producer selling into the cash pipeline and to the losses displayed by CBOT soybean and soyoil values. Some late day profit-taking was also evident and also helped to restrict the price gains seen in canola. Spreading was a feature of the activity and helped to augment the volume total. There were an estimated 21,452 canola contracts traded Wednesday, up from the 16,878 contracts that changed hands during the previous session. Western barley futures were unchanged. No contracts were traded on Wednesday. On Tuesday, no barley contracts changed hands. |
