ICE Canola Contracts Drop As C$ Strengthens
| 1 min read
| By Dwayne Klassen, Resource News International |
| March 12, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at lower price levels at midday with declines a function of the upward move in the value of the Canadian dollar, market watchers said.
The Canadian dollar early Friday was at its highest level in 20 months, pushing to the C$1.0165 or 98.37 US cent level. "Strength in the Canadian dollar has hurt crush margins for domestic processors significantly and also made canola less attractive on the export market," a broker said. As a result, demand for those sectors has declined. The downward price action in canola was augmented when CBOT soybean and soyoil futures began to turn lower shortly after the opening, traders said. A steady trickle of hedge offers from grain companies was also viewed as an undermining price influence in canola, brokers said. Record large soybean supplies in South America along with the prospect of increased area to canola this spring in western Canada also contributed to the bearish atmosphere in canola. Traders noted that it didn’t take much in the way of selling to move canola futures down in the thin volume totals. They also indicated that while a number of exporters and domestic crushers have backed away from the canola market, there was some scale down buying occurring by a few of these participants. There were an estimated 2,555 canola contracts traded at 10:31 CST. Of the contracts traded, 518 consisted of spreads. There were no western barley futures traded as of 10:31 CST. |
