ICE Canola Contracts Decline, Sell-Stops Amplify Loss
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 10, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower price levels at midday with much of the bearish price atmosphere associated with the steep upswing in the value of the Canadian dollar and the triggering of sell-stop orders, market watchers said.
The Canadian dollar strengthened significantly overnight and early Monday on news that an agreement has been reached which will resolve the euro-zone debt crisis, brokers said. The firm Canadian dollar sent canola downwards, with sell-stop orders being triggered on the way down, amplifying the price losses, traders said. The thinness of the volumes in canola helped to exaggerate the downward price slide. The improved soil moisture conditions across western Canada and weather outlooks calling for the return of warmer temperatures, were seen as ideal for planting and development of the various crops, traders said. The strong Canadian dollar also helped to reduce some of the demand that had come forward from domestic crushers. Commercials also slowed their coverage of old export business. Some underlying support in canola came from the advances seen in CBOT soybean and soyoil values. Some scale down buying by a variety of market participants was also evident and helped to generate some minor support, brokers said. The grain and oilseed stocks in all positions report from Statistics Canada early Monday was largely ignored by market participants, brokers said. There were an estimated 3,269 canola contracts traded at 10:28 CDT. Of the contracts traded, 606 were spread related. There were no western barley futures traded as of 10:28 CDT |
