ICE Canola Contracts Ease As C$ Remains Strong
| 1 min read
| By Dwayne Klassen, Resource News International |
| March 2, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at steady to lower price levels at midday with weakness associated mainly with the continued upward rebound in the value of the Canadian dollar against other foreign currencies, market watchers said.
The strong Canadian dollar was seen causing domestic processors to back away from the canola market as profit margins on the crush are reduced. The firm Canadian currency also makes it more expensive for importers to purchase Canadian canola. Activity in canola was described as light and choppy with market participants waiting for a clear signal as to which way values want to move, brokers said. Some of the weakness in canola was associated with the large on-farm supply of the commodity in western Canada and the huge glut of global oilseeds, traders said. The ongoing harvest of a record sized soybean crop in Argentina and Brazil were also seen as undermining price influences. The potential for US soybean area to be a lot larger than anticipated this spring also sparked some light selling interest in canola, traders said. Early selling in canola was also inspired by the declines posted by Malaysian palm oil futures overnight, brokers said. Tempering the price declines in canola were light scale-down commercial demand, said to be pricing old export business, brokers said. The buying back of previously sold positions was also evident and also helped to restrict the price weakness in canola. There were an estimated 4,072 canola contracts traded at 10:36 CST. Of the contracts traded, 1,534 consisted of spreads. There were no western barley futures traded as of 10:36 CST. |
