ICE Canola Contracts Climb On Production Setback
| 1 min read
| By Dwayne Klassen, Resource News International |
| July 7, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly higher levels at midday with support linked to the weather related production setback, market watchers said. Strength in the CBOT soybean complex contributed to the upward price action.
Good support in canola was tied to reports that canola output continues to be hampered by poor growing conditions. Wet conditions across much of western Canada have hurt canola output while dryness in the northern canola producing regions of Alberta were also negatively impacting yield potential, traders said. "Right now canola is losing ground, not improving," a broker said, adding that production prospects were believed to be down at least 30%. Support in canola was also stemming from the decision by producers to not deliver any significant amounts of canola into the cash pipeline given the uncertain production outlook for the crop, traders said. Weakness in the Canadian dollar and steady domestic processor demand also helped to influence the upside in canola. The pricing of old export business was also evident and added to the supportive price tone. The ability of the November canola future to penetrate technical resistance at C$430 was friendly, but brokers said the contract will need to hold these levels in order to confirm the uptrend. The upside in canola was being restricted in part by bouts of profit-taking. There were an estimated 3,512 canola contracts traded at 10:35 CDT. Of the contracts traded, only 244 were spread related. There were no western barley futures traded as of 10:35 CDT. |
