ICE Canola Contracts Mixed, Profits vs Domestic Demand
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| December 30, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading in a mixed range at midsession, with the nearby contracts down and the deferred values up. Year-end positioning encouraged some of the downward price action while steady demand from the domestic processing sector continued to provide support, market watchers said.
A big portion of the thin holiday activity consisted of spreading, with participants rolling positions out of the nearby January future and into the March contract, brokers said. Firmness in the Canadian dollar was an undermining price influence on canola with the currency trading virtually even with the US greenback. The lack of fresh export demand for Canadian canola and the downturn seen in CBOT soybean and soyoil futures helped to encourage the price weakness, traders said. Some underlying support in canola continued to come from steady domestic crusher demand and a drop off in the level of hedges coming from elevator companies, traders said. The pricing of old export business was evident and also provided a bit of a floor for canola futures. The dryness concerns in Argentina’s soybean growing regions were also helping to prop up canola values, traders said. There were an estimated 3,108 canola contracts traded at 10:56 CST. Of the contracts traded, an estimated 1,596 were spread related. There were no western barley futures traded as of 10:56 CST.
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