ICE Canola Drops On Bearish Charts, Hedges
| 1 min read
| By Dwayne Klassen, Resource News International |
| January 11, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at lower price levels at midday with declines associated with bearish chart signals and steady hedge selling by elevator companies, market watchers said.
Early losses in canola were tied to the losses seen overnight in Malaysian palm oil and Friday’s March canola settlement below the C$400 per metric ton level, traders said. The closure of the March future below C$400 triggered a wave of speculative liquidation orders, brokers said. Steady farmer deliveries into the cash pipeline during the weekend helped to spark much of the hedges that hit the commodity early Monday, traders said. General firmness of the Canadian dollar and the absence of fresh export demand contributed to the downward price action seen in canola. Reduced demand from the domestic processing sector, amid declining crush margins, helped to undermine canola. The losses in canola had been tempered in part by the firmer start seen in CBOT soybean and soyoil futures, brokers said. However, when the values at the CBOT began to turn lower, the losses in canola were amplified, they said. Adding to the bearish price sentiment were the good growing conditions for the soybean crops in South America and the large on-farm inventory of canola in western Canada, traders said. Light scale down commercial demand, believed to be pricing old export business, helped to restrict the price weakness in canola. There were an estimated 6,629 canola contracts traded at 10:46 CST. There were no western barley futures traded as of 10:46 CST |
