ICE Canola Futures Drop As China Move Sparks Fear
| 1 min read
| By Dwayne Klassen, Commodity News Service Canada |
| February 18, 2011 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at lower price levels at 9:27 EST. Declines were influenced by reports overnight that China has raised import taxes, which could negatively impact that country’s demand for edible oils, market watchers said.
The news weighed heavily on e-CBOT soybean futures overnight as well as in Malaysian palm oil and European rapeseed values. Sharply lower calls for CBOT soybeans with the start of the North American day session also influenced the price declines seen in canola. Nervous liquidation by speculative accounts added to the bearish price atmosphere with the absence of fresh export demand for Canadian canola also stimulating some selling of the commodity, traders said. Elevator company hedge selling, was described as light, but was enough to spark some downward price action, brokers said. The advancing harvest of the record sized soybean crop in Brazil and the fast developing Argentine soybean crop were also viewed as undermining price influences. Firmness in the Canadian dollar early Friday further weighed on canola futures. Some underlying support in canola came from steady domestic crusher demand and the pricing of old export business. The need to ration canola demand was also an underpinning price influence, traders said. Concerns about flooding this spring across the Canadian prairies, which may impact the amount of canola that will be seeded, also provided some underlying support for values, brokers said. Activity in canola was described as choppy ahead of Monday’s holidays. Monday is Louis Riel Day in Manitoba, Family Day in Alberta/Saskatchewan/Ontario and Presidents’ Day in the US. As of 9:27 EST, there were 5,008 canola contracts traded. As of 9:27 EST, no western barley contracts had been traded. |
