ICE Canola Climbs On Short-Covering Bounce
| 1 min read
| By Dwayne Klassen, Resource News International |
| January 21, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at higher price levels at midday with much of the upward price momentum associated with a short-covering bounce, market watchers said. The absence of willing sellers was helping to amplify the price advances. Both speculators and commodity funds have been scarce sellers during the past couple of sessions.
Canola futures had moved higher overnight on light follow- through buying from the demand that surfaced during Wednesday’s session, brokers said. Strength in Malaysian palm oil futures overnight also helped to underpin canola futures. Good commercial interest in canola provided a firm floor for the commodity with some of the demand said to be covering both fresh and new export business. Brokers noted that sales of Canadian canola were matching last year’s pace, and this was occurring despite the fact China has removed itself from the list of buyers. The Canadian dollar had shown signs of strength early Thursday, but the value of the currency has since weakened, helping to provide some support for canola futures. Weakness in the Canadian dollar was making Canadian canola more attractive on the export market, brokers said. Steady domestic processor demand was also fuelling some of the upward price action. Adding to the strength in canola were the advances being experienced by CBOT soybean and soyoil futures. The gains in canola were being offset in part by bearish chart signals and the huge global oilseed supply situation, traders said. Elevator company hedging was light, but not enough to put downward pressure on canola, brokers said. There were an estimated 3,940 canola contracts traded at 10:32 CST. There were no western barley futures traded as of 10:32 CST |
