ICE Canola Contracts Weaken As Deliveries Maintained
| 1 min read
| By Dwayne Klassen, Resource News International |
| October 18, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower price levels at midday. Weakness was associated with the steady stream of canola deliveries into the cash pipeline by western Canadian producers, market watchers said.
"Farmers are having to come up with cash to pay bills that are coming due, and right now canola is providing some of the best cash flow," a broker said. That steady flow of deliveries has elevator companies putting on some pretty good levels of hedges in the canola futures market, he said. Canola futures had flirted with both losses and gains overnight as well as in early morning activity. Some early strength in canola had been stimulated by the brief upturn seen in CBOT soybean futures just after the start of the North American day session, traders said. However, when the gains in CBOT soybean futures turned lower, the selling in canola was amplified, brokers said. Declines in CBOT soyoil values were also an undermining price influence. The lack of fresh export demand helped to spark some price weakness. Good underlying demand for canola from domestic crushers helped to restrict the price declines, brokers said. The pricing of routine export business to Japan also provided some underling support. The small pull-back in the value of the Canadian dollar also helped to provide a firm floor for canola futures. There were an estimated 5,871 canola contracts traded at 10:15 CDT. Of the contracts traded, 3,000 were spread related. There were no western barley futures traded as of 10:15 CDT.
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