ICE Canola Futures Down On Overnight Oilseed Weakness
| 2 min read
| By Dwayne Klassen, Resource News International |
| August 31, 2009 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at steady to lower price levels as of 9:20 EDT. Losses overnight in Malaysian palm oil, European rapeseed prices and in the e-CBOT soybean complex put downward pressure on the nearby November canola future, market watchers said.
The November contract was the only month to see any action in the overnight trade. The weakness in the November future also reflected the lower calls for CBOT soybean and soyoil futures with the start of the North American day session, brokers said. The losses in canola will be amplified by the losses seen in global crude oil futures. The absence of a frost in the weather outlooks for crops across the Canadian prairies was being viewed as an undermining price influence, traders said. They noted that temperatures this week will be above normal. Brokers noted that if no frost appears through to at least the middle of September, they expect the canola crop size to expand towards 10 million to 10.5 million metric tons. This would be up from the Statistics Canada recent forecast of 9.5 million tons. The removal of a frost forecast for the soybean crop in the US was also being seen as bearish for canola futures. The absence of fresh demand was also seen weighing on canola futures. Traders said Europe has also been making sales of rapeseed at the expense of Canadian canola, as they have a record large crop to sell. Underlying support in canola will come from the reluctance of producers to sell into the cash pipeline and from the pricing of previously made export business, brokers said. Steady domestic crusher demand was also expected to provide a firm floor for canola values. Weakness in the Canadian dollar early Monday was also considered an underpinning price influence, traders said. As of 9:20 am EDT, there were 480 canola contracts traded. Western barley futures were trading at lower levels with most of the action taking place in the October and November contracts. Spill-over liquidation selling by a US commodity index fund, which was seen on Friday, helped to put barley on the defensive overnight, traders said. Declining international barley prices and ample competing feed grains, helped to weigh on barley futures, brokers said. As of 9:20 EDT, 50 western barley contracts had changed hands.
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