ICE Canola Futures Drop As Demand Disappears
| 1 min read
| By Dwayne Klassen, Resource News International |
| August 11, 2010 |
| Winnipeg – Canola contracts on the ICE Futures Canada platform were trading at steady to weaker price levels at 9:32 EDT. A drop off in demand combined with talk of improved growing conditions across the Canadian prairies sparked the selling that took canola futures to lower ground, market watchers said.
The downward price action in canola was also a reflection of the improved yield potential in western Canada for Canadian canola output, brokers said. Market participants had been working with a Canadian canola production total of around 9.0 million metric tons, but have now bumped that estimate back up to around the 11.0 million ton level, analysts said. Weakness in canola also came as domestic processors and exporters have backed away from the market in anticipation of weaker values, traders said. Activity in canola was described as choppy and cautious, with market players hesitant to take too large of a position ahead of Thursday’s supply/demand reports, scheduled to be released by the USDA. Some underlying support in canola was coming from the continued pull-back in the value of the Canadian dollar and by a decline in the level of canola deliveries by Canadian prairie farmers into the cash pipeline, brokers said. Steady to slightly higher calls for CBOT soybeans and soyoil with the start of the North American day session was also providing some minor support to canola. As of 9:32 EDT, there were 1,700 canola contracts traded. As of 9:32 EDT, no western barley contracts had been traded. |
