ICE Canada Review: Weather Undermines Canola
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 17, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform finished on the defensive Monday with much of the downward price action associated with the favourable weather conditions across the key growing regions of western Canada, market watchers said.
The improved soil moisture situation across the Canadian prairies combined with the return of sunshine and warmer conditions have resulted in active seeding progress of canola and has provided fields with good germination, brokers said. The losses in canola were augmented by the weakness experienced by Malaysian palm oil futures overnight and the declines displayed by CBOT soybean and soyoil values during the North American day session, traders said. Ongoing concerns about the euro-zone debt crisis helped to fuel some selling by speculative accounts, especially as global crude oil futures tumbled, brokers said. The declines in canola were limited by steady commercial demand, believed to be pricing old export business to Japan, traders said. Scale-down buying by domestic processors also restricted the price weakness in canola. The pull-back in the value of the Canadian dollar also was an underpinning price influence as was the absence of farmer deliveries to the country elevator system. The producer offerings have declined as spring fieldwork was taking over from marketings, brokers said. Spreading was a feature of the activity and helped to augment the volume total seen in canola. There were an estimated 9,699 canola contracts traded Monday, down from 11,319 during the previous session. Of the contracts traded, 5,450 consisted of spreads. Western barley futures were untraded and unchanged Monday. No barley contracts changed hands during the session. On Friday, no barley contracts were traded. |
