ICE Canola Declines Amid Spec Selling, CBOT Losses
| 2 min read
| By Dwayne Klassen, Resource News International |
| January 8, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at lower price levels at midday with the downward price action being encouraged by steady speculative offering and the sharp losses seen in CBOT soyoil values, market watchers said.
Early weakness in canola was stimulated by the losses seen overnight in e-CBOT soybeans and Malaysian palm oil. The declines seen in CBOT soybean and soyoil futures with the start of the North American day session contributed to the downward price slide seen in canola, brokers said. Speculative offerings, tied in part to profit-taking, helped to weigh on canola futures, traders said. "There was some sell-stop hunting when the March canola future moved below C$400 per metric ton, but the contract is managing to hold that level for now," a broker said. The absence of fresh export demand and the bearish turn on the charts for canola were adding to the weakness in the commodity. Brokers also noted that should the index fund rebalancing fail to materialize in the CBOT soybean complex as had been anticipated Friday, a sell off could ensue and trigger the sell-stops sitting in canola. Elevator company hedge selling also continued at a steady pace, contributing to the bearish sentiment in canola, traders said. Light scale down commercial demand, believed to be the pricing of export business, helped to slow the price declines in canola. There were an estimated 5,808 canola contracts traded at 10:36 CST. Of the contracts traded, 724 were spread related. There were 85 western barley futures traded as of 10:36 CST. Weakness in western barley was linked to weather outlooks calling for the return of warmer temperatures to western Canada by next week. The warmer readings were seen reducing feed rations for livestock, brokers said. Much of the activity in barley was conducted between commercials. |
