ICE Canola Contracts Mostly Higher On Good Demand
| 1 min read
| By Dwayne Klassen, Resource News International |
| May 7, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mostly higher price levels at midday with steady domestic demand and strength in the CBOT soybean complex generating the upward price momentum, market watchers said.
Crush margins for canola continue to remain favourable and have helped to stimulate the demand from domestic processors, brokers said. Adding to the strength in canola was steady commercial demand, believed to be the pricing of old export business to Japan. The buying back of previously sold positions by commodity funds provided some minor support for canola. The upside in canola was being limited by the upturn in the value of the Canadian dollar and by the improved soil moisture conditions across western Canada for crop development, traders said. The advances in canola were also being restricted by the weakness in the energy and the North American equity sector. Sentiment that billions of dollars of margins are in need of being covered by investors was also viewed as bearish for the agricultural sector, traders said. They noted that in order to cover these margins, investors may sell their agricultural investments. Light, but steady hedge selling by elevator companies was also preventing canola from pushing too far upwards, brokers said. Some evening up of positions ahead of the weekend and Monday’s grain stocks in all positions report from Statistics Canada was a feature of the activity in canola. There were an estimated 5,200 canola contracts traded at 10:49 CDT. Of the contracts traded, 1,976 were spread related. There were no western barley futures traded as of 10:49 CDT. |
