ICE Canola Drops As Commercials Liquidate
| 1 min read
| By Dwayne Klassen, Resource News International |
| January 29, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at mainly lower levels at midday. Steady commercial liquidation orders, sparked by the downward price action seen in CBOT soybeans, accounted for the losses seen in canola, market watchers said.
Some of the price weakness in canola also reflected the adding of short positions by commodity funds to their portfolio, traders said. Bearish chart signals along with the absence of demand from the export and domestic processing sector, also contributed to the price declines in canola, brokers said. Adding to the bearish sentiment was the large domestic supply of canola and the ample global oilseed supply situation, particularly in view of the large South American soybean crop about to be harvested, brokers said. The losses in canola were tempered in part by the lack of farmer deliveries into the cash pipeline. Sentiment that canola was oversold and was due for an upward correction also offered some minor support. The pricing of old export business to Japan contributed some underlying strength to canola. Market participants were also anticipating the return of the large index funds to canola. Traders noted that a good part of the volume seen on Thursday consisted of the large index funds bailing out of their March position in canola and into the May future. There were an estimated 5,084 canola contracts traded at 10:33 CST. Of the contracts traded, 1,800 were spread related. There were no western barley futures traded as of 10:33 CST. |
