ICE Canola Climbs In Market Correction
| 1 min read
| By Dwayne Klassen, Resource News International |
| February 2, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at slightly firmer price levels at midday with strength linked to sentiment that values were in need of an upward correction after recent declines, market watchers said.
"I would call this a ‘dead cat bounce’ more than anything else," a trader said, explaining the gains seen in canola. Follow-through buying from the late gains seen on Monday, helped canola futures climb upwards overnight, brokers said. The advances in canola were also helped along by the advances exhibited by Malaysian palm oil and European rapeseed futures overnight. The advances posted in CBOT soybean and soyoil futures with the start of the North American day session also encouraged some of the gains seen in canola, brokers said. Some of the strength in canola was also linked to the reluctance of producers to deliver into the cash pipeline. Routine exporter pricing of old business to Japan and Mexico also offered some underlying support. Speculators were also seen buying back their previously sold positions, which helped to generate some minor strength in canola, brokers said. Much of the activity in canola was said to be spread related, with large index funds rolling out of the March canola contract and into the May future, traders said. There were an estimated 7,041 canola contracts traded at 10:38 CST. Of the contracts traded, 6,284 were spread related. There were 2 western barley futures traded as of 10:38 CST. Much of the weakness in barley reflected reduced demand from end-users, brokers said. Activity was a minor two way affair between commercials.
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